Why Closure of the Strait of Hormuz Could Ignite a War and a Global Depression
Ever since December 27th, war clouds have been gathering over the Strait of Hormuz, the narrow body of water connecting the Persian Gulf with the Indian Ocean and the seas beyond. On that day, Iranian Vice President Mohammad Reza Rahimi warned that Tehran would block the strait and create havoc in international oil markets if the West placed new economic sanctions on his country.
“If they impose sanctions on Iran’s oil exports,” Rahimi declared, “then even one drop of oil cannot flow from the Strait of Hormuz.” Claiming that such a move would constitute an assault on America’s vital interests, President Obama reportedly informed Iran’s supreme leader Ayatollah Ali Khamenei that Washington would use force to keep the strait open. To back up their threats, both sides have been bolstering their forces in the area and each has conducted a series of provocative military exercises.
All of a sudden, the Strait of Hormuz has become the most combustible spot on the planet, the most likely place to witness a major conflict between well-armed adversaries. Why, of all locales, has it become so explosive?
Oil, of course, is a major part of the answer, but — and this may surprise you — only a part.