Iran Will Disrupt Oil Supplies to The World If Attacked

It is only a matter of time before Iran declares ownership of the bomb

The unwise belligerent statements emanating from Tehran indicate a high degree of anxiety and fear that it might be the target of attacks by US and Israel. The objective is two-fold the first is to mobilise the Iranian public against any possible external aggression and the second is to warn potential aggressors that Iran has something up its sleeve.

It can create chaos in Iraq and disrupt oil supplies.

Most observers believe that Iranians are likely to get a nuclear weapon or at least the technology to make one.

There are genuine fears that Iran might pass the weapon to Hezbulla or to Al Qaeda in Iraq. Given the radical nature of the current regime under Ahmadenejad who declared his wish to erase Israel from the Map of the world. By acquiring the nuclear bomb, Iran would dominate the Middle East.

Iran vowed to resist any pressure and threats after the International Atomic Energy Agency decided to put the issue of Iran’s Nuclear Programme before the UN Security Council.

Ayatollah Ali Khamenei, the supreme religious authority and spiritual guide in Iran, attributed the pressures on Iran to U.S. hostility towards Iran since 1979, when the U.S cut diplomatic relations with Iran in the wake of the 1979 Iranian revolution that saw American diplomats taken hostage for 444 days.

The Islamic Republic News Agency reported that The Expediency Council Chairman Akbar Hashemi Rafsanjani has said “We cannot be intimidated.”

The Iranian President Ahmadinejad stated his people will not yield to threats from Western States and will continue with its nuclear research program.

Ali Larijani, a prominent foreign policy chief and a leading nuclear negotiator stated ominously last month, that “Iran has chosen the path of resistance until it achieves full access to nuclear energy.”

Iran can create problems on several fronts outside Iran, namely in Iraq, the neighbouring Gulf States, chiefly Bahrain, Saudi Arabia and Kuwait, also in Lebanon and the Palestinian territories. It can cripple the world economy through planned disruption of oil exports. Iran’s bravado is based on the assumption that the U.S. is embroiled in the Iraqi quagmire and is no mood to enter into a new military conflict, and the fact that America relies on the Middle East for more than 25% of its oil.

Outside Iran itself, the regime can cause havoc in Iraq through allies chiefly the Shi’ite militias. Since the fall of the fiercely anti-Iranian Saddam regime, Iran has reportedly exploited the unsecured borders with Iraq to move men and materials into Iraq. The Iraqi National Accord Party headed by former Iraqi Prime Minister Ayad Allawi, a secular Shi’ite accused pro-Iranian Shi’ite Coalition United Iraqi Alliance and the followers of the firebrand Shi’ite Cleric Moqtada Al-Sadr of carrying out revenge attacks against Sunni Mosques and thus fuelling the cycle of violence. Al-Sadr commands thousands of fighters in Iraq who have the capability of creating problems for American and British troops.

Indeed it can be argued that the failure of the U.S. and its allies in securing the borders after the invasion of Iraq helped Iran to penetrate Iraq and to establish an extensive network of friends, agents and collaborators whose aim is to create an Iranian style regime dominated by Shi’ite Clergy.

This is the grand design. However, the pro-Iranian elements could target U.S. military personnel, U.S. companies and installations. They could also target Iraqis believed to be supporters of the U.S. effort to establish democracy and stability.

But in the present situation this would mean the expansion of the insurgency base which would now include disparate elements who until recently were cutting each others’ throats. Their opposition to Israel and the U.S would unite them into a common front.

Iran’s ability to cause problems in Bahrain, Saudi Arabia and Kuwait cannot be underestimated. The Shi’ite populations of these countries are already agitating for more rights. The United Arab Emirates is a home for 560,000 Iranians who would not stand idle if their country of origin is attacked.

Lebanon is another cause for concern, where Hizbulla and Amal militias rely on Iran for financial and logistical support. Iran can mobilize its long time friend Syria in fomenting unrest in Lebanon through Hizbulla and Amal by targeting U.S and Western interests and mounting a new campaign of assassinations against individuals and groups deemed to be friendly to the U.S. and France. The other possibility, which cannot be ruled out, is the reactivation of Hizbulla attacks along the relatively quiet northern borders of Israel with Lebanon. Hizbulla has missiles stationed along the Israeli northern borders.

Hizbulla has always been ready to obey and carry out the Iranian and Syrian agendas in relation to Lebanon and Israel.

The most worrying question is whether Iran would be reckless enough to contemplate launching missiles against targets in the neighbouring Gulf oil producing countries to disrupt oil supplies and hurt America. More ominous would be the targeting of Israel which would almost certainly result in retaliation and escalation of the conflict.

Targeting the oil installations in the neighbouring Gulf States and imposing a blockade in the Gulf shipping lanes could push the price of oil to such high levels that make the current price of between 65 and 68 US dollars per barrel seem reasonable. This would slow global economic growth and cause panic in world stock exchanges leading to a world economic recession.

The easiest option for Iran to harm the U.S. is to shut its own oil production and exports. Imposing sanctions against Iran would squeeze world oil markets with an export ban. Europe, China and India would feel the cuts immediately. Some observers believe that China and India might oppose sanctions against Iran, failing that they may be tempted to conclude under the counter deals to secure the oil supplies to keep their industries going.

This would not be as easy as it sounds, especially if the UN Security Council demands that the shipping lanes in the Gulf are rigorously monitored. However secret oil deals are unlikely as China and India would not risk damaging their relations with the U.S. which far outweigh the damage resulting from the disruption to oil supplies.

The US doesn’t import Iranian oil directly, but the impact would cause a price hike for the American consumer. An export ban would have an impact on world markets. Prices would rise to USD 100 or more per barrel .This would remove about 3 million barrels a day from the world market.

Iran is the 2nd largest oil producer in the Middle East and holds 10% of world reserves.

Some oil analysts believe that supplies of oil are already tight due to South East Asian demand and a strong US economy. Kuwait and Saudi Arabia are producing to maximum capacity and they cannot do a lot in the short term.

Russia suffers from chronic infrastructural problems and cannot therefore increase production in the immediate term. Nigeria the producer of high quality light crude (Bonny Light) is not producing to full capacity owing to armed insurgency in the Delta region where the biggest fields are located. Iraq production is unreliable due to the chaos and violence that are tearing the country apart. In the short term the picture is grim.

The deputy secretary of Iran’s Supreme National Security Council Javad Vaheedi told reporters in Vienna recently that Iran will have to review its oil-export policy if the pressure mounts against Iran, meaning the oil would be used as a weapon in the confrontation with the world community. Mr. Ali Larijani Iran’s chief nuclear negotiator said Tehran was not keen to use oil as a weapon, “but if conditions changed it could affect our decision.”

The impact of an interruption is not one sided. Iran will suffer too.

It would deprive Iran of much needed income which would bring hardship to the hard pressed Iranian population the majority of whom are classified as poor by western standards.

Iran relies on imports for many of its refined petroleum products requirements. Moreover 50% of the population is under 25 and the unemployment rate is 11% which means Iran needs to create 1 million jobs a year. It is therefore ludicrous for the Iranian President to claim time and again that the West needs Iran more than Iran needs the West. The damage to Iran can be more severe than is admitted.

We must remember that the popular Ahmadinejad is a democratically elected leader and he enjoys the support of the masses, therefore he feels strong enough to make threats. Iran’s ability to cause mischief cannot be underestimated and therefore it would be foolish to ignore the threats.

Nehad Ismail
Nehad Ismail is a writer and broadcaster, who writes about issues related to the Middle East from his home in London.