Saturday, March 31, 2007

New Iran crisis, harsh words from Saudi Arabia -- a new immediate threat to oil supplies?

Suddenly, the echos of earlier periods of history come back. Iran captures 15 British sailors in territory that Britain claims belongs to Iraq, and may have actually been in dispute since the 1980s Iran-Iraq war. The latest news is a war of words an messages between Britain and Iran, summarized here: The exchanges sound a bit like the ultimatums made during July 1914 before World War I erupted. This certainly reminds one of a grave crisis between the US and Iran 27 years ago

After the Iran hostage crisis (involving the US Embassy) erupted in November 1979, there were constant concerns that Iran could try to close the Straits of Hormuz, disrupting major oil supplies. In fact, there had been spike shortages of gasoline in early 1979 after the Shah Mohammad Reza Phlavi fell and was replaced by the Ayatollah Ruhollah Khomeini during the Iranian revolution of 1978-1979. This was during Jimmy Carter’s presidency, and Carter made a failed attempt to rescue the hostages in April 1980, of great embarrassment to the U.S. Electronic Data Systems (EDS) of Dallas actually rescued two of its own employees with a mercenary commando raid during that time.

Saudi Arabia’s King Abdullah makes a harsh criticism of continued American presence in Iraq. There story is here.
The remarks appear to be timed to take advantage of the crisis, dispute the historical dispute between Sunnis and Shiites that fuels sectarian violence in Iraq, an ironic situation when viewed from a bird’s eye view by a westerner. This all must be viewed in the backdrop where many Americans now have grave doubts about the apparent lack of integrity, or at least competence in intelligence, with which the current Bush administration has pursued the activity in Iraq.

In the mean time, oil and gasoline prices go up quickly, as the threat, however remote, exists of a Hormuz blockade or even another embargo. During the 1980s, the US Navy patrolled the Strait regularly to reduce the risk of blockage during the Iran-Iraq war, even resulting in occasional minor skirmishes, a little-known fact reported by some veteran or retired sailors who have since fought the military “don’t ask don’t tell” policy.

Update: 4/5/2007

The 15 Sailors have been returned to Britain. Here is the ABC News story.

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