July 11 2012
The Strait of Hormuz - again
The Strait of Hormuz once again features prominently in the news as the Iranian threats to close or interfere with shipping through the Strait intensify and the counter threats equally so.
We need not remind the reader of the importance of free passage in the Strait not only for Arabian Gulf countries but for the world at large. Especially in energy terms there is no complete alternative to the passage of about 17 million barrels a day (mbd) of crude oil, almost 84 million tonnes a year of liquefied natural gas and over 2 mbd of petroleum products and condensate.
The world has no way of replacing these volumes no matter how much governments try. Arabian Gulf countries depend on oil exports revenue for their livelihood and this is irreplaceable in the foreseeable future. Therefore, closing the Strait would be tantamount to declaring war on the region’s countries and many oil and gas importing countries worldwide.
The new threats are seen to be a result of the European Union sanctions on Iranian oil which started on July 1 where Iran is likely to lose some 400,000 barrels a day of exports. Coupled by already reduced imports from Iran by other countries Iranian exports may now be only 1.5 mbd as opposed to 2.5 mbd a few months ago. But the question is will Iran risk losing what is left of its export by closing the Strait of Hormuz? Will this be an act of shooting oneself in the foot?
Many analysts do not believe Iran’s rhetoric and even Iran may be having second thoughts about it. The current attempt to pass a resolution in the Iranian parliament gives us some indication. Iran now believes that it can legally control shipping through the Strait and parliament is trying to pass legislation allowing the armed forces to prevent the passage of any oil carrier to countries that are part of the embargo on Iran. No one knows whether such legislation will pass or if higher Iranian authorities will ratify it and no one knows exactly how the interdiction will be carried out especially as the greater majority of the shipping lanes are in Oman territorial waters and Iran cannot claim otherwise.
The “legal” Iranian argument relies on some interpretation of the 1958 Geneva Convention of the Law of the Sea as some Iranian officials claim that according to the Convention Iran can suspend the passage from the Strait of Hormuz for countries that impose sanctions against Iranian oil and gas imports and exports. The said convention is now replaced by the 1982 UN Law of the Sea which Iran signed but has not yet ratified. Iran believes that the new convention only applies to countries that have ratified it. But the law is generally accepted even by countries who have not signed it, such as the US, as some legal experts claim that it has become part of “customary law”.
The legalities or otherwise are best left to the experts and I am not one. But Bahman Aghai Diba, PhD International Law of the Sea recently wrote on Payvand Iran News that “Iran has signed but not ratified the 1982 convention, and according to the law of treaties, it is under the commitment to refrain from doing anything contrary to it between the signature and ratification period” and that “the littoral states of straits used for international navigation do not have the right to suspend the innocent passage in such waterways”.
Yet Soraya Sepahpour-Ulrich of Global Research said on July 5 “although Iran has signed the Treaty, the Treaty was not ratified, as such, it has no legal standing”.
The Iranians continue to carry out military exercises and introduce new armaments to the Strait and the United States has moved significant military reinforcements to the region by sending in advanced jets and one senior defence department official said “don’t even think about closing the strait. We’ll clear the mines. Don’t even think about sending your fast boats out to harass our vessels or commercial shipping. We’ll put them on the bottom of the Gulf.”
Still Mitt Romney accused Obama of being “weak” in dealing with the Iranian nuclear issue. The Iranian Foreign Minister Ali Akbar Salehi, speaking on the latest talks on the nuclear issue said that failed talks would mean that “the other alternative is confrontation.”
These sometimes conflicting signals may only be a war of nerves but the risk of accidental collision is there and may pull many countries into a conflict of widespread implications. No wonder the price of oil has reacted sharply and rose by almost $10 (Dh36.7) a barrel in a few days.
Source: Gulf news