The Situation With Iran and the Strait of Hormuz

[Pentaprism]

The US is apparently actively trying to stop all Iranian Oil Exports;

US launches plan to choke off Iran's energy exports, casting uncertainty over oil prices

Given Iran depends heavily on Oil Exports, to put it mildly, is this not akin to a Declaration of War?

What can and/or will Iran do about it?

How will their Customers, especially China react to this?

I find it staggering that the US can basically close down Countries it is Geopolitically opposed to (eg Venezuala, Iran) at will without any legal basis and seemingly with no repercussions from the International Community.

Is Russian intervention in Syria an indication we getting close to the limits of US Power? Or was that just an anomaly and will blatant US bullying of any Countries with opposing views will continue to be the norm?

 

[Ananda]

I find it staggering that the US can basically close down Countries it is Geopolitically opposed to (eg Venezuala, Iran) at will without any legal basis and seemingly with no repercussions from the International Community.

I will only talk on US action based on legal base. Financial industries for whatever reason..still depend much of it to 'US Dollar' transaction system. Also much of world financing centers are still within US or US influences.

In short, US can blockades any transaction with Iran or Venezuela or North Korea that are using USD or Financial transaction influenced by US Financial systems.
And Like it or not..it's legal. That's why only very limited countries that are 'Large Enough' in global financial trade (like China) or already do much effort to reduce their trade from US influences Financial trade due to their own saction by US (like Russia) that can circumstances US financial market.

You can trade with Iran as long as you don't used US financial influenced system. The thing is, much of the world still trading with US financial influenced system. For example most global Banks still using 'SWIFT' system on transacting with each other internationally. That system still centered on financial centered in US or under US influences. You can trade internationally without this system, but most of the Banks only want to trade using this system Internationally. And you need global Banks if you want to trade 'normally'.

That's why one of the reasons, some countries being attracted to China's initiative of 'OBOR' or One Belt One Road..as they see as alternative way to circumstances US influenced Financial system in trade. It doesn't mean the countries that being attracted to China's OBOR wants to get out from 'established' Global Financial trade (which again centred on US influenced Financial center)...but they want to see alternative system.

 

[ngatimozart]

I will only talk on US action based on legal base. Financial industries for whatever reason..still depend much of it to 'US Dollar' transaction system. Also much of world financing centers are still within US or US influences.

In short, US can blockades any transaction with Iran or Venezuela or North Korea that are using USD or Financial transaction influenced by US Financial systems.
And Like it or not..it's legal. That's why only very limited countries that are 'Large Enough' in global financial trade (like China) or already do much effort to reduce their trade from US influences Financial trade due to their own saction by US (like Russia) that can circumstances US financial market.

You can trade with Iran as long as you don't used US financial influenced system. The thing is, much of the world still trading with US financial influenced system. For example most global Banks still using 'SWIFT' system on transacting with each other internationally. That system still centered on financial centered in US or under US influences. You can trade internationally without this system, but most of the Banks only want to trade using this system Internationally. And you need global Banks if you want to trade 'normally'.

That's why one of the reasons, some countries being attracted to China's initiative of 'OBOR' or One Belt One Road..as they see as alternative way to circumstances US influenced Financial system in trade. It doesn't mean the countries that being attracted to China's OBOR wants to get out from 'established' Global Financial trade (which again centred on US influenced Financial center)...but they want to see alternative system.

Agree and I read recently, America Isn't as Powerful as It Thinks It Is, that the current US practice of getting offside with its friends and allies is driving them to actively look at bypassing US systems and instituting alternate methods for trading and transferring funds internationally. Hence the possibility exists that the tactic of sanctions will backfire on the US having unintended unwelcome consequences for the US.

 

[John Fedup]

There was talk of trying to make the Euro the world's reserve currency years ago. The financial actions of some members along with policy differences made this option next to useless. The only other option is China but most of the world would be very uncomfortable with a reserve currency managed by a totalitarian regime. The most likely change will be the result of some future disaster, financial or otherwise.
,

 

[Ananda]

There's a lot of effort for many countries to build bilateral or multilateral agreements on using each respective countries currency on trade with each other. However the problem in my opinion is not there. The problem is, the financial center in the world is dominated by US markets.

Even Shanghai as financial market has developed multiple times throughout this last two decades, but it's still dwarfed in term of financial transaction by New York or London..
Heck..even In Asia it's still has to compete with Hong Kong, Tokyo or Singapore.

When financial markets still dominated by New York or London (which is very interconnected with US Financial system)..then you still has to deal with USD.
No matter Europe try to make Euro as alternative to USD, problem is Paris still not in same leaugue as New York or even London on international Financial trade.

International trade, depends on International Financial capital circulation on keeping it going. When that circulation still mostly dominated by USD, then it's hard for exporter or importer using other currencies only without in stage has to used USD as common exchange currency.

Thus, that's the problem. To circumstances USD, then your international financial trade has to by pass New York. The thing is nobody now that conducted Global Financial Trade can bypass New York, San Francisco or London. I'm some stage, those fund still has reroute on those Financial centers, which again has to be traded in USD.

China now using direct transaction with Iran..which will enable them to pay in Renimbi/Yuan..which for Iran means they have to take huge discount.
China it self now betting that their global trade already huge enough, that US can't sidelined them in Global financial trade without hurting US financial centers it self.

Will that betting pays..? I believe it will be some compromise between US and China on this. Still with Trump.. anything can happen

Just to add:
If anyone still wondering how USD become so powerful..well it started with Bretton Woods system. With all trade using intermonetary regime, by the time, the currencies that belong to largest trading nation (thus US) begin to dominate International trade.
When US in 1971, decided to end Gold Pegging..that's the final 'coup' of USD to International Trade..this basically made USD as 'global currency' that also control by US.
For me by that time, US already win 'cold war'.

 

[Feanor]

for Iranian members who thinks in case of any conflict Russia or China will intervene or even help or even give lip service think twice never mind UNSC


Putin has sent it signal and message to west clearly after pampeo vist to Russia

I think we can safely say that Russia will give lip service. But it's likely that they will do little more, and instead capitalize on the US getting stuck in another war to grow their influence elsewhere.

 

[Ranger25]

I don’t see any geopolitical or strategic rationale for any ground war between the US and Iran. If anything would be done it would be surgical strikes not a land invasion.

That said, western bases throughout the gulf region would be targets for IRBMs as well as asymmetrical actions from Quds

 

[Ranger25]

With two more DDG51s transiting the Straight, that makes 5 by my count. The Lincoln Group has three along with its CG



Two U.S. Warships Enter Persian Gulf Without Incident - USNI News

 

[John Fedup]

Reports are coming in about a tanker being torpedoed in the Gulf.

Tanker reportedly torpedoed near Strait of Hormuz

 

[John Fedup]

An addtional link on the tanker incident.

U.S. Warship Responding to Distress Calls in Gulf of Oman - USNI News

 

[yavar]

Oil tankers attacked off Oman

PressTV-‘Two oil tankers hit by explosions in Sea of Oman’

The first released images from the attacked oil tankers in the Oman Sea

 

[John Fedup]

News sources are reporting the US blames Iran for the latest attacks on tankers.. The ships apparently were damaged by mines, not torpedoes.

 

[OPSSG]

In the past month, US officials such as Bolton and Secretary of State Mike Pompeo, as hawks, have framed the issues around Iranian activity—threats from Iran’s proxies against US troops and personnel, purported attacks against shipping interests, and the transport of short-range ballistic missiles around the Persian Gulf. Which is a very wide approach, instead of a narrow one.

I don't see military escalation as being in American interest at this point; until

• they present evidence; and
• come up with an exit plan via escalation dominance, in case of increased hostilities (in the face of Iranian desire for continued escalation),

when their mid-term goal is to have a smaller footprint in the Middle East and seek an exit from Iraqi and Syria. Further, Trump is not Ronald Reagan (who had the ability to convincingly talk to the American public through his presidential addresses to make his case for small wars, prior sending in troops). Pew Research in October 2018 shows that America’s international image continues to suffer a year after global opinion of the United States dropped precipitously. Favorable views of the U.S. remain at historic lows in many countries polled. In addition, more say bilateral relations with the U.S. have worsened.

News sources are reporting the US blames Iran for the latest attacks on tankers. The ships apparently were damaged by mines, not torpedoes.

The SUN: Iran accuses the US of LYING about the ‘suspicious’ attack on American-linked oil tanker and denies ordering ‘torpedo’ assault

As expected, Iran has accused the US of lying about the "torpedo attack" on an oil tanker.

These are limpet mines (a type of naval mine attached to the ship by magnets by hand). The Iranians are no longer so silly (in the case of Operation Praying Mantis in 1988), where they used an Iranian ship to lay naval mines, giving Ronald Reagan the proof he needed and the excuse to take military action against the Iranians. While it is suspected that Iran or its-backed militias that did this.

Business Insider: The Navy has reportedly found a smoking gun as the US blames Iran for the latest tanker attack that threatens the global oil market

* The US Navy discovered an unexploded limpet mine attached to one of the two tankers attacked on Thursday.
* The mine, which was discovered by the USS Bainbridge, is a potential smoking gun because it very likely points to Iran's involvement in the attack on the commercial vessels.

 

[Massive]

As expected, Iran has accused the US of lying about the "torpedo attack" on an oil tanker.

This would be quite reasonable if they were not involved.

Regards,

Massive

 

[ngatimozart]

In the past month, US officials such as Bolton and Secretary of State Mike Pompeo, as hawks, have framed the issues around Iranian activity—threats from Iran’s proxies against US troops and personnel, purported attacks against shipping interests, and the transport of short-range ballistic missiles around the Persian Gulf. Which is a very wide approach, instead of a narrow one.

I don't see military escalation as being in American interest at this point; until

• they present evidence; and
• come up with an exit plan via escalation dominance, in case of increased hostilities (in the face of Iranian desire for continued escalation),

when their mid-term goal is to have a smaller footprint in the Middle East and seek an exit from Iraqi and Syria. Further, Trump is not Ronald Reagan (who had the ability to convincingly talk to the American public through his presidential addresses to make his case for small wars, prior sending in troops).

The SUN: Iran accuses the US of LYING about the ‘suspicious’ attack on American-linked oil tanker and denies ordering ‘torpedo’ assault

As expected, Iran has accused the US of lying about the "torpedo attack" on an oil tanker.

These are limpet mines (a type of naval mine attached to the ship by magnets by hand). The Iranians are no longer so silly (in the case of Operation Praying Mantis in 1988), where they used an Iranian ship to lay naval mines, giving Ronald Reagan the proof he needed and the excuse to take military action against the Iranians. While it is suspected that Iran or its-backed militias that did this.

Business Insider: The Navy has reportedly found a smoking gun as the US blames Iran for the latest tanker attack that threatens the global oil market

* The US Navy discovered an unexploded limpet mine attached to one of the two tankers attacked on Thursday.
* The mine, which was discovered by the USS Bainbridge, is a potential smoking gun because it very likely points to Iran's involvement in the attack on the commercial vessels.

If it was a torpedo attack, it would be hard to deny because what non state actor would have access to a platform from which to launch torpedoes undetected. Mines, especially limpet mines, however are another story and are able to be deployed by stealth by anyone with the appropriate training.

The US is blaming the Iranians for these attacks, but it is the US who initiated this round of tensions by unilaterally withdrawing from the nukes agreement and then illegally imposing economic sanctions on Iran. I say illegally, because the sanctions being imposed are not approved by the UN. The claims made by the Us that the attacks are by Iran has to be taken with some caution because of those making the claim, namely Bolton, Pompeo and co. The latest evidence offered is that a limpet mine recovered is Iranian, but that does not mean that the mine was placed by an Iranian operative on orders of the Iranian govt. It could'be be placed by a non state actor attempting to stir things up, or it is a false flag operation by another nation trying to initiate hostilities between Iran and the US. There are four nations who I think are very capable of and have sufficient motive for such an act. Finally it could be an overt act by Iran, but TBH what does Iran have to gain from it at the moment? They are trying to get the other 5 nations to get the US to honour the agreement. The oil cargo was bound for Japan and they had the Japanese PM in Tehran at the time. In either case such an act by Iran would be counterproductive. They have the moral high ground because of the unilateral action of the US and by the US imposition of economic sanctions, technically it has committed an act of aggression / war against Iran.

 

[spoz]

No international law prohibits the imposition of sanctions by one government on another; it may be a (recent) convention that it is only done with UN agreement and of course the UN Charter provides the positive authority to do so, but it does not imply the negative. It could even probably be argued that it’s an immoral thing to do, but it’s not “illegal”; which is, in any case, a concept which cannot easily be applied to the actions of nation states unless they are acting in breach of a treaty which the country concerned has ratified.

In this case there is also the fact that Iran is not necessarily a unitary organisation when it comes to such things; if the IRGC felt that it needed to act it might not bother telling the political groups who theoretically run the country that it was doing so. That said, however, and despite some of the comments coming from the US SecDef and the video, there isn’t any evidence yet in the public arena which proves that it was not one of the other non state actors, or indeed that it was not a third party seeking to act as an agent provocateur; and the argument that it seem to be a stupid thing for Iran to do at this time is certainly valid.

 

[Ranger25]

If it was a torpedo attack, it would be hard to deny because what non state actor would have access to a platform from which to launch torpedoes undetected. Mines, especially limpet mines, however are another story and are able to be deployed by stealth by anyone with the appropriate training.

The US is blaming the Iranians for these attacks, but it is the US who initiated this round of tensions by unilaterally withdrawing from the nukes agreement and then illegally imposing economic sanctions on Iran. I say illegally, because the sanctions being imposed are not approved by the UN. The claims made by the Us that the attacks are by Iran has to be taken with some caution because of those making the claim, namely Bolton, Pompeo and co. The latest evidence offered is that a limpet mine recovered is Iranian, but that does not mean that the mine was placed by an Iranian operative on orders of the Iranian govt. It could'be be placed by a non state actor attempting to stir things up, or it is a false flag operation by another nation trying to initiate hostilities between Iran and the US. There are four nations who I think are very capable of and have sufficient motive for such an act. Finally it could be an overt act by Iran, but TBH what does Iran have to gain from it at the moment? They are trying to get the other 5 nations to get the US to honour the agreement. The oil cargo was bound for Japan and they had the Japanese PM in Tehran at the time. In either case such an act by Iran would be counterproductive. They have the moral high ground because of the unilateral action of the US and by the US imposition of economic sanctions, technically it has committed an act of aggression / war against Iran.

I don’t disagree with the majority of your commentary but, IMO, it’s been a very long time since the Iranian Regime has held any “moral High Ground”.

 

[ngatimozart]

I don’t disagree with the majority of your commentary but, IMO, it’s been a very long time since the Iranian Regime has held any “moral High Ground”.

I believe in this case it does and I agree it is a rarity.

As an aside, about 8 or so years a second cousin of mine (both Kiwis) and his now wife bicycled from the PRC through to Greece. Can't understand why myself because that is why the gods gave us Harleys . Anyway part of their trek was through Iran and from memory they spent about 3 - 4 months cycling through there. Towards the end they were held up because of a mechanical fault and had to get a part in from Turkey, which involved one of them doing a quick trip to Turkey to acquire the part. As a result their visas was running out and they were still in the middle of the wop wops. So they found a small city, went to the local authorities to apply for an extension to their visas for a couple of weeks. They explained the circumstances, the guy takes their passports & goes away for a while, then comes back with a 3 month visa extension no questions asked and a big smile. They said that everywhere they went in Iran, the people were so open and welcoming, inviting them into their homes for meals, to stay etc. Any interactions that they had with officialdom was always pleasant and non confrontational. Other people who have been there have told me the same as well. Yet I worked for an Iranian who left the country when the revolution happened because he and his family would've been killed on sight. He was a kid at the time and as far as he's concerned he's Persian, not Iranian and only Muslim by conquest, so doesn't practice at all. His favourite meal is roast pork followed by bacon and he's partial to his booze. Great guy too and one of the best people I ever worked for.

 

[OPSSG]

I have never seen US external credibility at such a low point in the World stage; and no one can afford to believe neo-conservatives without evidence. We’ll have to wait for a drip feed of information by the Pentagon. The Trump administration’s hostility toward the 2015 nuclear deal, the Joint Comprehensive Plan of Action (JCPOA) is an important reason for the general lack of trust with American policies and actions. Tehran has complied with the accord; Europe, Russia and China have embraced it; and yet the U.S. repeatedly violated it by depriving Iran of its economic dividends and eventually failed to comply with it when, in May 2018, President Trump withdrew the US from the agreement altogether. At the same time, Iran’s crude exports fell to about 400,000 barrels per day (bpd) in May 2019 from 2.5 million bpd in April 2018, draining Tehran’s main source of revenues and hurting an economy already weakened by years of isolation. Iran has repeatedly warned it would block the Strait of Hormuz, if it is barred from selling oil.

In this case there is also the fact that Iran is not necessarily a unitary organisation when it comes to such things; if the IRGC felt that it needed to act it might not bother telling the political groups who theoretically run the country that it was doing so. That said, however, and despite some of the comments coming from the US SecDef and the video, there isn’t any evidence yet in the public arena which proves that it was not one of the other non state actors, or indeed that it was not a third party seeking to act as an agent provocateur; and the argument that it seem to be a stupid thing for Iran to do at this time is certainly valid.

Yes, this is my concern. The character of warfare is changing, where Iran is expected to employ a blend of conventional and irregular warfare — what is often called 'hybrid warfare’ or ‘operations in the gray zone,’ if it is the IRGC.

 

[OPSSG]

The US will need to consult it’s allies before taking stronger action (see: U.S. focus is to build global consensus after Mideast oil tanker attacks: Shanahan - Reuters) but the drip feed of news by the Pentagon continues to build a case.

I believe in this case it does and I agree it is a rarity.

CNN: Iranian boat fired missile at US drone prior to tanker attack, US official says

(i) It seems that the Iranians spotted a MQ-9 flying overhead and launched a surface-to-air missile at the unmanned aircraft, a US official told CNN. The missile missed the UAV and fell into the water, the official said. Prior to taking fire, the American MQ-9 observed Iranian vessels closing in on the tankers, the official added, though the source did not say whether the unmanned aircraft saw the boats conducting an actual attack. This first claim that the US has information of Iranian movements prior to the attack.

(ii) As the Japanese-owned tanker attacked in the Gulf of Oman this week is being towed to port, American experts are now on board, and have found pieces of the magnet -- which held the limpet mine to the ship -- still stuck to the hull. US Central Command released a timeline of events that officials say show Iranian involvement in the attack along with photos and a video claiming Iranian Revolutionary Guard Corps Navy units were responsible for limpet mine attacks on the two ships:

• Both vessels were in international waters in the Gulf of Oman approximately 10 nautical miles apart at the time of the distress calls. USS Bainbridge was approximately 40 nautical miles away from the M/T Altair at the time of the attack, and immediately began closing the distance.
• At 8:09 a.m. local time a U.S. aircraft observed an IRGC Hendijan class patrol boat and multiple IRGC fast attack craft/fast inshore attack craft (FAC/FIAC) in the vicinity of the M/T Altair.
• At 9:12 a.m. local time a U.S. aircraft observes the FAC/FIAC pull a raft from the M/T Altair from the water.
• At 9:26 a.m. local time the Iranians requested that the motor vessel Hyundai Dubai, which had rescued the sailors from the M/T Altair, to turn the crew over to the Iranian FIACs. The motor vessel Hyundai Dubai complied with the request and transferred the crew of the M/T Altair to the Iranian FIACs.
• At 11:05 a.m. local time USS Bainbridge approaches the Dutch tug Coastal Ace, which had rescued the crew of twenty-one sailors from the M/T Kokuka Courageous who had abandoned their ship after discovering a probable unexploded limpet mine on their hull following an initial explosion.
• While the Hendijan patrol boat appeared to attempt to get to the tug Coastal Ace before USS Bainbridge, the mariners were rescued by USS Bainbridge at the request of the master of the M/T Kokuka Courageous. The rescued sailors are currently aboard USS Bainbridge.
• At 4:10 p.m. local time an IRGC Gashti Class patrol boat approached the M/T Kokuka Courageous and was observed and recorded removing the unexploded limpet mine from the M/T Kokuka Courageous.