By ending waivers granted to China, India, Turkey, Japan, and South Korea on buying sanctioned Iranian oil, President Trump has put those countries in a position in which they must choose between their own economic stability, and U.S. foreign policy goals. In addition to this risky move, Iran has vowed retaliation, which could include an attempt to close the Strait of Hormuz, the strategic choke point at the end of the Persian Gulf through which 20% of the world’s oil flows. Ritter explains the riskiness of this strategy at The American Conservative, writing (abridged):
The effort on the part of the Trump administration to shut down Iran’s ability to export oil is predicated on the false notion that the rest of the world will fall in lockstep with U.S. policy. But has President Donald Trump really thought through what would happen to the economic health of the world if Iran retaliates, shutting the Strait of Hormuz, through which much of the world’s oil flows daily?
The Trump administration’s push to reduce Iran’s oil exports to zero has entered a new, critical phase, with the United States refusing to extend the waivers it granted six months ago to eight nations, including China, India, Turkey, Japan, and South Korea, to purchase Iranian oil. Moreover, the United States has refused to allow for a “wind-down” period where impacted nations would be able to gradually wean themselves away from Iranian sources of energy. This means that, effective May 1, any nation purchasing oil from Iran will be subjected to punitive U.S. sanctions.
The Strait of Hormuz is one of the most critical sea lanes in the world today, transiting some 18.5 million barrels of crude and refined products per day, representing roughly 20 percent of all oil produced globally. There is universal consensus among energy analysts that any closure of the Strait of Hormuz would result in “catastrophic” consequences for the global economy.
The military debate over Iran’s ability to close the Strait of Hormuz, and the U.S. ability to respond to such a threat, is moot—no insurance company will cover any oil tanker seeking to transit contested waters. The economic impact of any closure will be immediate, catastrophic and sustained. Even if the United States prevailed in a military conflict over the Strait of Hormuz (and it is not certain it would do so), any victory would be pyrrhic in nature, with the United States sacrificing its national economic health, and that of the rest of the world, on an altar of hubris that fails to advance the national interest in any meaningful fashion.
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