The Times: Iran’s threat to disrupt the Wests oil supplies if it makes a mistake in the confrontation over Tehrans nuclear programme looks like the latest move in a round of bluff and counter-bluff. The Times
Analysis by Michael Binyon
IRANS threat to disrupt the Wests oil supplies if it makes a mistake in the confrontation over Tehrans nuclear programme looks like the latest move in a round of bluff and counter-bluff.
But although this latest warning by Ayatollah Ali Khamanei has pushed up the price of light crude amid fears of a global oil shortage, the threat could easily backfire. Iran needs to sell its oil more than the West needs to buy it and any interruption in exports could quickly cause anger and unrest at home, with severe consequences for the Islamist regime.
The Iranian threat remains unspecified, and has been taken to mean a possible attack on oil shipments through the Gulf of Hormuz. That inevitably would invite military retaliation by the United States, for it would be seen as an unprovoked attack on international shipping, especially if the suplies targeted were from Iraq or Kuwait.
The Iranian leadership could, however, be thinking of cutting its own production in order to push up the price and to make the West suffer. That, too, would be dangerous. The 1973 Arab oil boycott had a lasting effect on the West, stimulating the search for alternative supplies, prompting industrialised nations to build up big strategic reserves and boosting Western political determination not to allow itself itself to be open again to international blackmail.
There is now a firm agreement with Saudi Arabia that it will boost production to balance any shortfall that could lead to a catastrophic price rise. The Saudis, the worlds largest producer, have undertaken to raise production to compensate for any attempt by Iran, a traditional rival, to cut production and increase prices.
Yet Irans population boom some 60 per cent of its 68 million people are under 25 means that the Iranian leadership is under strong domestic pressure to produce fast economic growth to keep pace. Oil is so vital that any sudden shortfall in export revenue would be catastrophic, and would increase the grumbling that has already begun among many Iranians.