Iran Readies To Disrupt World Oil – How Iran Will Respond To Sanctions


On May 8, 2018 President Trump took the United States out of the disastrous Iran nuclear deal. It was a good first step in the direction of a sane national security policy in regard to Iran. It was, however, only the first step.

Most criticism of the Joint Comprehensive Plan of Action (JCPOA) has centered on the weakness of its enforcement provisions and the likelihood that Iran would be able to continue to develop nuclear weapons regardless of its provisions. These are valid concerns. They are by no means the most pressing or immediate.

The truth is that the JCPOA was always a pretext. The Obama Administration, convinced apparently that all conflict in the world was the fault of war mongering Western powers and that the world would be an inherently better and safer place if only the United States were less powerful and other entities, like the Islamic Republic of Iran, empowered, sought the political means to walk away from sanctions and the containment policy that had constrained the Ayatollahs since 1979. To that end a convenient fiction was created.

We were, we were told, on the brink of war. The Iranians were moments away from having “the bomb.” We had two choices. We could wage war to disarm the Iranians or agree to set Tehran free of isolation in exchange for a deal and peace. Only madmen, we were assured, would choose war.

It was, of course, a lie. Sanctions had brought Iran to the brink of collapse. The obvious preferred option was to maintain and even increase economic pressure and force the ayatollahs to make a choice between survival and nuclear weapons. It did not matter. With the help of representatives of the Iranian regime who visited the White House secretly no less than thirty-three times in the months preceding the signing of the deal, we capitulated. In exchange for a weak, unenforceable agreement we released Iran from sanctions and set it loose to wreak havoc in the world.

Recognizing that the JCPOA was a horrible, self-inflicted wound and walking away from it was a good beginning. That doesn’t change the fact, though, that the Iranians have set the Middle East on fire and have no intention of going willingly back into isolation. This beast will not simply return to its cage. It will have to be driven back in.

A key step in that process begins today with the re-imposition of sanctions on Iranian oil exports, Iranian shipping and Iranian financial transactions. Over 600 individuals and companies in Iran will face sanctions. Even worse for Iran, these sanctions are specifically designed to target the energy sector and to bring Iranian oil exports to a complete halt.

Already Iranian oil exports have dropped by a third since April of this year. As the new sanctions snap into place only a handful of nations, granted temporary exemptions by the United States, will continue to import any Iranian oil at all. Meanwhile Saudi Arabia has stepped forward to fill the gap in world oil supply left by Iran and ensure that the world economy is not faced with an oil shortage. Iranian oil is being driven from the world market, and it will not be missed.

The sanctions now restored will have a disastrous impact on the Iranian economy. As they gradually tighten, that impact will only become more severe. Iran is already facing major economic problems at home and has faced growing domestic dissent. At stake is not simply the ability of Tehran to sustain its support to Hezbollah and other groups and to export revolution. At stake is the continued existence of the regime itself.

Since May when Trump walked away from the Iran nuclear deal and the United States began to reinstitute measures aimed at isolating the Iranian economy, the Iranian economy has gone into a nosedive. The value of the rial, the national currency, has plummeted. Prices have skyrocketed for basic commodities. European companies that rushed in to do business after the nuclear deal was signed have walked away.

Unrest has begun to bubble to the surface. In recent months there have been protests across Iran on a scale not seen since 2009. Marchers in the street are openly calling for the ayatollahs to leave the country. In a nation where the official unemployment rate is 13% and one-third of young people have no work, a failing economy means the death of the regime.

The Iranian regime is not simply being isolated. It is being strangled to death.

Faced with this life or death situation, it is all too possible that Tehran will choose to lash out and make the United States and its allies pay a price for renewed sanctions. Such action is unlikely to come in the form of conventional military action, which would clearly justify an overwhelming conventional American response. It is much more likely that such Iranian action will come in the form of unconventional, even deniable actions that will make it less likely that the United States will be able to respond effectively.

The Iranians have already shown the template for one such attack. On July 25, 2018 two Saudi supertankers in the Red Sea were attacked by a volley of anti-ship missiles fired by Iranian-backed Houthi rebels in Yemen. Per Debka , prior to the attack on the two Saudi supertankers, Saudi and Emirati intelligence intercepted communications between an Iranian flagged “cargo” ship, the Saviz , and Houthi rebels. In the communications, the Saviz, which is in reality a weapons-carrying spy ship, provided targeting data to the rebels, which was then used in the attack on the Saudi ships. The Iranians told the Houthis exactly where the tankers were, their course and speed and when and where to strike them.

As of a few days ago the Saviz remained at anchor in the Red Sea precisely where it was on July 25, 2018. It presumably continues to track Saudi shipping and to prepare to support the next wave of attacks once they are ordered.

The Iranians have also demonstrated recently an advanced attack drone capability. Iran has along its border with Iraq and the Persian Gulf coast large numbers of Saeghe stealth drones (based in part on the advanced US RQ-170 Sentinel captured by Tehran in 2011). These drones have the capacity to carry out the same kinds of attacks previously executed by exploding IRGC speedboats. They have already been used effectively in Syria. To date, they appear to have been capable of executing attacks without detection by US or allied forces.

In short, the Iranians have a vast array of assets they can use to target commercial shipping and bring oil traffic out of the Red Sea and the Persian Gulf to a halt. It is all well and good for the Saudis to commit to pumping enough oil to make up for what will be lost when Iranian crude no longer makes it to market. That won’t mean anything, however, when that Saudi oil can’t go anywhere.

None of this is theoretical. This is, unfortunately, as real as it gets. One need only listen to the Iranians themselves to understand exactly what they intend.

Speaking last Friday to worshippers during a sermon, Iran’s powerful Shia cleric, Ayatollah Ahmad Alamolhoda had this to say “If we reach a point that our oil is not exported, the Strait of Hormuz will be mined. Saudi oil tankers will be seized, and regional countries will be leveled with Iranian missiles.”

Listen to the man. He means exactly what he says. We are backing a dangerous animal into a corner, and we must, of necessity, prepare now for what happens next.

Houthi cruise missiles are only one of the asymmetric threats that Iran can field against shipping in the Red Sea, one of the world’s most strategic waterways. In 2017 a Saudi frigate was struck by a remote-controlled drone boat crammed with explosives. The attack took place in broad daylight and killed two Saudi sailors. Using the same technique and more explosives, Houthi rebels could easily cause major damage to or even sink a slow-moving oil tanker.

The Houthis have also been supplied with sea mines by the Iranians. Recently released video shows them in possession of the weapons and threatening to use them against shipping in the Red Sea. Deployment of mines in commercial shipping channels would effectively close the Red Sea to shipping until laborious and costly demining operations were complete. In 2016, roughly 4.8 million barrels of oil and petroleum passed through the Bab el Mandeb, the strait at the entrance to the Red Sea. Over half of that was headed to Europe.

Iranian support to the Houthi rebels is only part of its preparation for the possible disruption of world oil supplies however. Even more robust preparations have been made to close the Strait of Hormuz at the entrance to the Persian Gulf. Iranian Revolutionary Guard Corps (IRGC) forces have carried out exercises in recent months to prepare for just such an action. “We will make the enemy understand that either everyone can use the Strait of Hormuz or no one,” the IRGC’s commander Major General Mohammad Ali Jafari said on July 5, 2018. One third of the world’s seaborne oil passes through the Strait of Hormuz every day.

The powerful quasi-military IRGC has hundreds of small boats and semi-submersible craft. It also works closely with the Iranian navy, which operates twenty-one indigenously produced Ghadir midget submarines. These vessels, specifically designed to operate in the shallow waters of the Persian Gulf, carry torpedoes capable of sinking any commercial vessel.