12/29/2011

US Warns Iran Not to Close Key Oil Route

VOA
The United States has sharply warned Iran against any move to close the vital Strait of Hormuz, after Tehran threatened to block oil shipments coming through the waterway if the West imposes sanctions targeting the country's crude oil exports.
Pentagon press secretary George Little said Wednesday that “interference with the passage of vessels through the Strait…will not be tolerated.”
Separately, a spokeswoman for the Bahrain-based U.S. Fifth Fleet told VOA in an email that the flow of goods through the strait is “vital to regional and global prosperity.” Lieutenant Rebecca Rebarich said the U.S. Navy is ready to “counter malevolent actions” to ensure navigation freedom.
Earlier, Iran's top naval officer, Admiral Habibollah Sayyari, said closing the Strait of Hormuz would be “very easy” for his forces, although he added that no immediate action is “necessary.”
Sayyari is the second Iranian official this week to raise the possibility of closing the entrance to the Persian Gulf in response to Western threats to put sanctions on Iran's petroleum exports because of its controversial nuclear program.
On Tuesday, Vice President Mohammad Reza Rahimi said that if Iranian oil is banned, “then not a drop of oil will pass through the Strait of Hormuz.”
Iran's warnings come as its naval forces continue a 10-day exercise in the strait and nearby waters that began on Saturday.
Iran contends its uranium enrichment program is for civilian purposes, but a United Nations report issued last month said Tehran appears to be secretly working on designing a nuclear weapon.
European Union ministers have said that a decision on further economic sanctions – including a boycott of Iranian oil – will be made in the coming weeks. The vast majority of Iran's foreign revenue comes from oil exports.
More than one-third of the world's tanker-borne oil supply passes through the Strait of Hormuz. A closure could temporarily cut off some oil supplies and force shippers to use longer, more expensive routes. It could impact the price of oil worldwide.
But after an initial spike following the Iranian threats, oil futures edged lower on Wednesday. The Associated Press quoted a Saudi oil ministry official as saying Gulf oil producers would be ready to step in, if necessary, to make up for any losses of Iranian crude.