Appearing on Fox Business yesterday, former Bush administration National Security Adviser Stephen Hadley described a harrowing threat to energy security posed by Iran: the Islamic Republic closing the Strait of Hormuz where the Persian Gulf goes out to sea. The strait is a crucial transit point for oil tankers from Gulf kingdoms such as Saudi Arabia, but Iran controls one side of the bottleneck.
While omitting the elephant in the room, Hadley effectively outlined one of the likely disastrous effects of an attack on Iran. In town for a war game organized by an advocacy group that emphasizes energy insecurity, Hadley told Fox’s Eric Bolling:
HADLEY: [I]f you think about it, most of our oil comes from states that are unstable and in the Middle East or states like Venezuela and Libya and Iran that bear is no good will.
BOLLING: Sir, I have pointed this out in the past, a scenario that could happen. They tried it in the past. Iran could close off the Strait of Hormuz, that very, very short world oil choke-point, cutting off not one or two million barrels a day but 17 million barrels a day. A very easy put them to do. What would happen to the price of oil and the American economy?
HADLEY: The price of oil would skyrocket. I am sure you would see more than 200 barrels — dollars a barrel for oil. The economy would be in severe straits. Our military will tell you that in time there will be able to reopen the Strait of Hormuz, but it wouldn’t have to be closed very long to have a devastating impact on our economy and the global economy. It’s not just the United States. But the United States is particularly vulnerable because we are struggling and it is of course where we live so we care about it.
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Leaving aside that Canada and Mexico export vastly more oil to the U.S. than “unstable” Middle East states or enemies, Hadley and Bolling put forward a scenario where Iran decides unprovoked to close down the Strait of Hormuz. While that’s unlikely, other plausible situations exist where Iran would likely be very tempted to close down the transit point for about a quarter of the world’s oil: in retaliation for a strike. This, too, is not a certainty, but military analysts have noted the distinct possibility and the Iranian military itself has said it would react to an attack by closing the Strait.
In short, if you want to avoid “skyrocket(ing)” oil prices and “a devastating impact on our economy and the global economy” due to an Iranian closing of the Strait of Hormuz, the best way to do it would be to not attack Iran.