The Strait of Hormuz: Overlooked?

Abstract:While news reports focus on Iraqi weapons inspections, student demonstrations grow in Iran, which borders the Strait of Hormuz. Forty percent of the world's oil transits this strait every day.

Analysis:Largely unnoticed in the saber rattling over U.N. inspections of Iraq these days is one of Iraq's neighbors. Raise your hand if you have read anything about the latest round of university demonstrations in Iran. Dynamics are underway in Iran that are as potentially explosive as the student-led revolution in 1979, which brought fundamentalist Islamic clergy to power 22 years ago this month.

The latest incident involves Teheran's Modarres University after history lecturer Hashem Aghajari was sentenced to death earlier this month for criticizing the Islamic clergy claim that authoritarian clerical rule was a divine right. So far, student demonstrations have been confined to university campuses in Teheran while Islamic fundamentalist militia prowl threateningly across the street from university grounds.

At the uneasy center is the moderate regime of Mohammad Khatami, which has pleaded with both sides to keep things peaceful. It doesn't always happen that way in Iran. In the summer of 1999, security forces and fanatical Islamic militiamen went rampant as they descended upon a university dormitory rally, beating student participants. One person was killed and Teheran witnessed its worst week of unrest since the 1979 Islamic revolution. Student leaders were jailed and Mr. Khatami's legislative reform efforts subsequently suffered parliamentary setbacks at the hands of conservatives.

Once again, Mr. Khatami has proposed political reforms that would rein in the powers of the conservative judiciary and the Guardian Council. Both are under the death grip of a fundamentalist clergy and backed by ideologues in the Revolutionary Guards and the Islamist Basij militia. While newspaper headlines focus on whether Iraq is playing cat and mouse with the U.N., little verbiage is directed to the ongoing struggle in Iran to balance hard-line clerical control of the state government against popular demand for reforms that would broaden democratic participation. President Khatami, a moderate reformist, wins elections by landslides, which protects him from the increasingly isolated hard-line clergy. But he has threatened to resign if conservative elements arbitrarily block his reform program in the Parliament. Should you care? Iran and Iraq combined possess crude production capacity nearly equal to Russia. They are just two of several pillars of instability surrounding the Persian Gulf. Around this waterway, geopolitical uncertainty is the norm rather than the exception.

While Iraq is at the western end of the Persian Gulf, it is what lies at the eastern end that is of interest at the moment. This is the Strait of Hormuz. You remember it from high school geography. It is the narrow passageway that separates the 600-mile long Persian Gulf from the Gulf of Oman and the Indian Ocean. Make a list of the world's most strategic waterways and the Strait of Hormuz ranks near the top. Eighty percent of exported Persian Gulf oil slows for a hairpin turn through a waterway 34 miles wide. In-bound shipping follows a lane two miles wide. There is a two-mile wide buffer zone, then outgoing shipping flows in a channel on the northern, or Iranian, side of the strait. Each day 13 to 15 mmbbls of oil—40 percent of the world's supply—makes the slow turn through this bottleneck. There are three islands to the west of the strait, and these are at the center of a long-running ownership dispute between the United Arab Emirates and Iran.

Iranian troops first occupied the islands in the early 1970s, though the three had been jointly administered by the UAE and Iran. Ten years ago Iranian troops increased their presence, essentially usurping UAE control. One of the islands, Abu Musa, sits near a large offshore oilfield, the proceeds of which were to be split between Iran and the UAE. In 1995, Iran declared all three islands to be a part of Iran, then rejected a Gulf Cooperation Council offer to take the dispute to the International Court of Justice at The Hague, Netherlands for resolution. The Iranians built a power plant on one of the islands and opened an airport on another. Three years ago Iran purchased three Russian-built submarines as part of a reported defensive ploy to shutdown the Strait of Hormuz in the event of a crisis. The strategy involves anti-ship cruise missiles, marine minefields, and swarms of armored seacraft led by Chinese-built military patrol boats. In 2000, Iran conducted an eight-day military training exercise on the islands involving 8,000 soldiers and 100 ships.

Doesn't the U.S. Navy patrol the Persian Gulf? Yes it does. But consider what happened during a Pentagon war game simulation earlier this year. The general playing the bad guy quickly shut the Strait of Hormuz and promptly sank two naval battlegroups. War game organizers were not pleased and re-floated the flotilla. The role-playing general then successfully defended a sea invasion. He did both by avoiding radio communications and relying on such low-tech methods as couriers to negate U.S. technological prowess. War game organizers cried foul, removed the crafty general from the simulation and had his replacement play by rules that allowed the exercise to proceed along lines that enabled the good guys to win.

Again, this was just a simulation.

What if the strait is shut down? It is possible to transport Persian Gulf oil to international markets via alternate routes. Two large pipelines cross Saudi Arabia, but it costs more to move oil by pipeline. There are some who question whether the Saudi pipelines can handle the 13 mmbbls/d of oil that transit the strait, though others insist the Saudis have so much redundant capacity that it is not a real problem. Most of the oil transiting the Strait of Hormuz goes to Japan, China, or India. Additional oil flows to Western Europe. Some of that oil is exported to the United States.

Meanwhile, the dispute between the United Arab Emirates and Iran has not been resolved, although the Gulf Coastal Council is on record supporting United Arab Emirate claims to the islands. Why worry? After all, the U.S. imports as much oil from Canada or Venezuela as it does Saudi Arabia. Then again, Venezuela is undergoing spontaneous mass demonstrations this week as various groups express frustration with beleaguered president Hugo Chavez, who barely survived a coup attempt last April.

While the Iraq headlines commandeer the daily news, it is wise to remain vigilant about these other events, which remain buried in the back pages of international publications.

Just a couple more things to keep in mind when considering our nation's thirst for imported oil.