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U.S. warns Iran against closing key oil passage

TEHRAN, Iran — The United States strongly warned Iran on Wednesday against closing a vital Persian Gulf waterway that carries one-sixth of the world's oil supply, after Iran threatened to choke off traffic through the Strait of Hormuz if Washington imposes sanctions targeting the country's crude exports.

The increasingly heated exchange raises new tensions in a standoff that has the potential to spark military reprisals and spike oil prices to levels that could batter an already fragile global economy.

Iran's navy chief said Wednesday it would be "very easy" for his country's forces to close the strategic Strait of Hormuz, the passage at the mouth of the Persian Gulf through which about 15 million barrels of oil pass daily. It was the second such warning by Iran in two days, reflecting Tehran's concern that the West is about to impose new sanctions because of its nuclear program.

"Iran has comprehensive control over the strategic waterway," Adm. Habibollah Sayyari told state-run Press TV, as the country was conducting a 10-day military drill near the strait.

The comments drew a quick U.S. response.

"This is not just an important issue for security and stability in the region, but is an economic lifeline for countries in the Gulf, to include Iran," Pentagon press secretary George Little said. "Interference with the transit … of vessels through the Strait of Hormuz will not be tolerated."

Many analysts believe that Iran's warnings are little more than posturing, but they highlight the delicate nature of the oil market, which moves as much on rhetoric as supply and demand.

U.S. warns Iran against closing key oil passage 12/28/11 [Last modified: Wednesday, December 28, 2011 10:19pm]
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