The Strait of Hormuz: The Great Equalizer

[AuH20]

Possibly the only reason that Iran is not a smoldering ruin already. The Rand Corp's columnist even agrees with the analysis.

http://www.rand.org/commentary/2012/10/02/USIP.html


Iran's repeated threats to close the Strait of Hormuz are a pivotal part of a military strategy based on psychological and asymmetric warfare. Blocking the strategic waterway, through which 90 percent of Persian Gulf oil flows to the outside world, would have sweeping implications for regional security and global oil markets. It may be the Islamic Republic's most potent weapon. Tehran has also hinted it would retaliate against U.S. forces, notably the Fifth Fleet based in the Persian Gulf, if it is attacked.

Since the 1979 revolution, Iran has developed sufficient military capabilities to back up its threats. The Revolutionary Guards Navy may be able to inflict damage on U.S. forces. It operates hundreds of small and relatively fast attack boats, some armed with sophisticated anti-ship cruise missiles. Its fleet could attempt to swarm larger U.S. ships and try to penetrate their defenses, even if they could not destroy the more powerful American vessels. Iran could also fire missiles at U.S. warships from its 1000 mile-long Gulf coastline. An even more controversial Iranian move would be scattering mines either near the Strait or in the Persian Gulf, which could slow or stop shipping as the U.S. Navy tried to clear the waterway.


Iran might instead seek to repeat the strategy used by Hezbollah in the 2006 war with Israel—holding ground by bleeding the adversary. It may hope to emerge as the political and psychological victor by hitting a few U.S. warships, perhaps even a carrier, causing high oil prices, and increasing international pressure—all tactics designed to force the United States to stop its strikes.

Impeding shipping in the narrow Strait would give Iran much-needed leverage since it cannot technically win a military confrontation against the United States. Just by threatening to close the Strait, Iran increases pressure on the United States to restrain Israel from attacking Iran. Other key players—including major oil importers such as China, Japan, and India—would be reluctant to support military action because of heavy dependence on Persian Gulf oil. Closing off the Gulf sealanes would also limit the flow from Saudi Arabia and the neighboring oil-rich sheikhdoms, which Iran may calculate gives it a psychological edge.

[jtstellar]

question is china really. they need someone to back them up. without light at the end of the tunnel all struggle is meaningless. issue is china may be under covert overthrow of their next political heir, or at least there is some major political turbulence under way. you can catch wind of it here and there, through their choking silence but much leaked signs of political abnormalities, including that seat-absence when hilllary clinton went to visit

if iran doesn't reap the economic benefit from having the backing of another super power opposed to the united states, its economy will collapse first and its political power fracture before anything happens to the rest of the world. last time i checked, their currency devalued drastically since the US sanction and currency fluctuated as much as some 40% devaluation within weeks. there's bound to be many political adversaries using this to advance their bid to overthrow iran's government internally and come to reign themselves. country will fracture over this.

if china indeed is going through political turmoil and even poses risk of fracturing themselves much like iran, and if this becomes a factor to take them out as the US' major rivalry, commodity could collapse over this as people flee back to the dollar as its major opponent is gone. this is the only scenario where commodity could have a major correction in this unstable environment and fiat currency's life could become much extended, holders need to keep an eye out.