Strait Of Hormuz

layoutshooter

Veteran Expediter
Retired Expediter
Theory aside and rather not valid.

There is UAE, Iraq and saudi Arabia we only trade with that may be affected if war broke out but the striaghts in context of our exports do not pose a threat to our economy. The only true threat to our national interest is the market reaction to the shortage of oil that can effect the price because of the emotion involved.

There is Kuwait and Qatar as well. The "theory" is far more valid than you may think.

Oil is a problem here ONLY because we refuse to use our own resources. We have the ability to be free of imports if we so choose. Too many wackos and poor regulations in the way.
 

Pilgrim

Veteran Expediter
Retired Expediter
There is far more than oil that pass through those straights, Greg. Yes, EVERY other country on the earth with a navy should be there keeping those straights open, but they are not.

It is also not only about Iran, it is more about who is directing Iran in this.

Greece is a problem, economics world wise is. Shutting down those straights will have a major impact and could be the "tipping point" for the world's economy.
It would be more than a tipping point - probably more like the edge of the cliff. Considering how the price of gas goes up when something like a thunderstorm over Houston happens, it's hard to imagine what would happen if the Straits of Hormuz were blocked. However, this is not the first time Iran has threatened to close the Straits and in 2006-07 a group of scholars at the Heritage Foundation did a study - or simulation - of what the consequences of such a closure would be.
Based on their modeling, if Iran succeeded in fully blockading the strait for up to one week, Americans would see a massive spike in oil prices, a one-quarter drop in GDP of $161 billion, the loss of one million jobs, and a drop of real disposable personal income costing more than $260 billion.

War Games, An Energy Crisis, and the Iranian Threat

If Iran Provokes an Energy Crisis Modeling the Problem in a War Game
If anyone is inclined to read through the second link which offers a detailed report of the simulation, keep in mind that these are 2007 numbers based on U.S. and European economies that were in much better shape than they are now. Granted, 85% of the oil passing through through the Straits goes to Asia but the recipients of those shipments include U.S. allies like Japan, South Korea and India, all of whom would naturally expect us to keep these international waters open. Even if the Chinese might want to get involved, the effect on the economy would still be disastrous due to the effects on oil prices.

Regarding pipelines being used as alternatives, they are already in existence but are only capable of about 1/3 the capacity of oil transmission that goes through the straits every day. The largest is the Saudi East-West pipeline that's good for about 5 mil. bbl/day, and it's already in use - so there would be little net gain from that option. A couple of other pipelines could be reactivated but their contribution would be insignificant.
Located between Oman and Iran, the Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. Hormuz is the world's most important oil chokepoint due to its daily oil flow of almost 17 million barrels in 2011, up from between 15.5-16.0 million bbl/d in 2009-2010. Flows through the Strait in 2011 were roughly 35 percent of all seaborne traded oil, or almost 20 percent of oil traded worldwide.

Source: U.S. Government (Click here to zoom out for alternate routes)



U.S. Energy Information Administration (EIA)
Here's the bottom line: the U.S. needs to keep that passageway open at all costs. Iran does not get to decide whether or not international waters are open or closed, and the interests of the U.S. in this situation are extremely important to say the least. If there are any presidential candidates in the race that don't understand what's at stake here, they have no business taking up space on a ballot.
 

layoutshooter

Veteran Expediter
Retired Expediter
"Here's the bottom line: the U.S. needs to keep that passageway open at all costs. Iran does not get to decide whether or not international waters are open or closed, and the interests of the U.S. in this situation are extremely important to say the least. If there are any presidential candidates in the race that don't understand what's at stake here, they have no business taking up space on a ballot."


Amen brother. We must also keep in mind that this goes for all of the open waters of the world, not just these straights.
 

purgoose10

Veteran Expediter
There is far more than oil that pass through those straights, Greg. Yes, EVERY other country on the earth with a navy should be there keeping those straights open, but they are not.

It is also not only about Iran, it is more about who is directing Iran in this.

Greece is a problem, economics world wise is. Shutting down those straights will have a major impact and could be the "tipping point" for the world's economy.

I agree. We only get 11% of our oil from Saudi, but our allies get a lot more and we are bound to protecting them. If we got the pipeline from Canada and the new reserves in Alaska we could posibly get less. I listened to a Navy Admiral say that the Iranian Navy would take us 15 minutes to sink. I hope the water deep enough to float over it.
Iran is using this as a ploy. They know that the price of crude will go up just with their threats. So right now its si-war and nothing more. Lets just hope that it stays that way and nothing more.
 

greg334

Veteran Expediter
No one has yet come up with a clear reason how this is a direct threat to our economy with no uncertain terms of the affect that negativity impacts us immediately.

Everything I have yet read puts into terms that it would effect us through others and not directly.

Iran is posturing for the most part and with Russia and China and even Japan (who has been trading with them for an while), the "international" community for that region are the ones who need to step up with iran's trading partners.

The must at all costs puts us in a position that we have to act regardless what impact it has on us and our country even though they have yet to attack us or declare war on us. We seem to forget that our failures with our recent past and present operations have done nothing for because of our ignorance, we are going to step into another quagmire to deal with a country that has yet to have the power to do much.

For the most part we fail on another level, our priorities. With issues within our borders while our southern neighbor is fighting pretty much a civil war, our cocern is in a place that is meaningless to much of our population.
 

greg334

Veteran Expediter
How are we bound to protect their interest?

The last time I looked our allies seem to have military that can handle Iran.
 

Pilgrim

Veteran Expediter
Retired Expediter
No one has yet come up with a clear reason how this is a direct threat to our economy with no uncertain terms of the affect that negativity impacts us immediately.
Everything I have yet read puts into terms that it would effect us through others and not directly.
Keep reading - you'll eventually discover that it's THE PRICE OF OIL.
 

AMonger

Veteran Expediter
Keep reading - you'll eventually discover that it's THE PRICE OF OIL.

Yep. Even the fact that most of that oil goes elsewhere impacts the world oil market, and prices would skyrocket here. If those other countries have their oil blocked, they're going to have to get itnelsewhere, and that elsewhere is the world market.

--

You know the problem with bad cops? They make the other 5% look bad.
 

greg334

Veteran Expediter
I've said that the impact to us is the market but I am not seeing the need for the "at any cost" being stated when it isn't needed as much as other issues that are at any costs.
 

greg334

Veteran Expediter
Just another thing that comes to mind, when Iraq closed their oil fields down and when Libya was producing little oil, we did not see the spike of oil prices as pridicted with Iran's actions.
 

Pilgrim

Veteran Expediter
Retired Expediter
How are we bound to protect their interest?
The last time I looked our allies seem to have military that can handle Iran.
OK, let assume for a minute that the Iranians decide they're going to close the straits and president Ron Paul (I list him as the decision maker because not even Obama would allow this to happen) decides that he's not going to intervene and let our allies take care of the mess. First of all, our allies (and our enemies) will have just been given the confirmation that the U.S. can no longer be depended upon for anything. Considering their problems with their neighbors to the north, the South Korean navy is unlikely to make much of a contribution to the effort. Same for the Japanese, whose navy is tied up with protecting their own territories and maritime economic zone - the world's 7th largest. That leaves the Indian navy which could probably take care of the Iranians without too much difficulty if they were forced to go that route. But while they're engaged in a shooting war with the Iranians and the Paul administration is leading cheers from the sidelines the American public is faced with two areas of immediate damage: (1) the PRICE OF OIL spikes to never-before-seen highs and our economy goes straight to the dumper (see study of Heritage Foundation linked in previous post). (2) The international influence of the United States of America sinks to never-before-seen lows leaving the Russians and especially the Chinese an opportunity to increase their influence with a number of our FORMER allies.

We need to understand that this threat with the Straits of Hormuz is not the same as that of Argentina trying to take the Faulkland Islands. If that passageway gets closed the effect on our economy will be severe and immediate, so what the U.S. needs to do is stay the course with their announced policy to keep it open. Fortunately, Obama and all the GOP candidates - save one - seem to be on the same page with this issue. So long as we keep our naval forces in the region the Iranians are highly unlikely to challenge them and the oil tankers keep sailing.
 

greg334

Veteran Expediter
Pilgrim the problem is that you and a lot of others seem to miss a lot of information about Iran and their capibilities.

If they close the stiaghts their first problem is sustaining it with their limited resources.

Then their exports will be limited, thinking that OPEC (which has more pull in the middle east than we ever had) will step in and do what they do best, take Iran's oil off the market and demand that Iraq and other countries stop buying natural gas.

As for our image, we have not just appear to be unreliable but are. Sk can do the job without us as can most of the world. We are not bound to act against our long term interest.
 

Pilgrim

Veteran Expediter
Retired Expediter
Pilgrim the problem is that you and a lot of others seem to miss a lot of information about Iran and their capibilities.
If they close the stiaghts their first problem is sustaining it with their limited resources.
Not hardly; I'm not overestimating their capabilities and neither is the team of PhD.s at Heritage who have considerably more information at their disposal than you or I. Even in their limited state, the Iranians could cause considerable economic damage to the US, Europe and Asia if they were able to close or impede the Straits for a week or two. Regardless of their bluster and hyperbole, they won't try it so long as we have naval and military assets in close proximity. Our economic interests require that we maintain that stability.
As for our image, we have not just appear to be unreliable but are.
No argument there, thanks to Barack Hussein Obama
Sk can do the job without us as can most of the world. We are not bound to act against our long term interest.
"Most of the world" can't even come close. S. Korea and Japan are tied up with their regional problems as previously described. The Iranians would probably challenge anybody else, save Russia, China and maybe India. However, if we follow Ron Paul's advocacy and Obama's implicit intentions to allow them to develop nuclear weapons, the whole picture changes for the extreme worse.
 

greg334

Veteran Expediter
Well there is an idea that sometimes the think tanks are paid to come up with what is asked for.

As for our image, this was being trashed in the 60's long before our present leader. Bush did not help much.
 

AMonger

Veteran Expediter
...However, if we follow Ron Paul's advocacy and Obama's implicit intentions to allow them to develop nuclear weapons, the whole picture changes for the extreme worse.

That's presuming they are building nuclear weapons. They are signatories to the non-proliferation treaty and have been inspected by the IAEA, and they say the Iranians are not doing so.

2012: Ron Paul or not at all.
The lesser of two evils is still evil.
 

AMonger

Veteran Expediter
...However, if we follow Ron Paul's advocacy and Obama's implicit intentions to allow them to develop nuclear weapons, the whole picture changes for the extreme worse.

That's presuming they are building nuclear weapons. They are signatories to the non-proliferation treaty and have been inspected by the IAEA, and they say the Iranians are not doing so.

2012: Ron Paul or not at all.
The lesser of two evils is still evil.
 

layoutshooter

Veteran Expediter
Retired Expediter
That's presuming they are building nuclear weapons. They are signatories to the non-proliferation treaty and have been inspected by the IAEA, and they say the Iranians are not doing so.

2012: Ron Paul or not at all.
The lesser of two evils is still evil.[/QUOTE/]

I don't buy it for one second. They have been developing, with the help of the Russians, ballistic missile delivery system for years. They keep increasing the range of those systems. All of those missiles are capable of delivering nukes. They launch them on a regular basis.

here are Russians in those nuke areas. They are behind the work going on in Iran. Have been for at least 20 years.

The Russians are also developing new, larger, delivery systems, paid for by US tax dollars, for a while now. They are also modernizing their nukes, while we are not. They are taking advantage of a weak president and congress. So is Iran.
 

layoutshooter

Veteran Expediter
Retired Expediter
Wouldn't you think if Russia is helping Iran, they would just sell a nuke to Iran?

Nope, the treaties don't allow for that. The Russians always live up to the shell of the treaty, working around it in any way they can.

Once Russia believes that they US will no longer be a threat to enforce the treaties they will show their true colors. That day is coming and much sooner than some may think.
 
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