• Oil Patch Press

Are We Staring Down the Gaping Yawn of War Over Oil?

Iran claims to completely control the Strait of Hormuz (T. Paraskova, oilprice.com, 8/29/2018). Saudi Arabia claims Iran cannot close the Strait, therefore, could not have complete control (Saudi Gazette, 8/29/2018). The only point both views agree upon is this: military action will be required immediately if Iran does anything stupid. That means war.


What triggered this sudden aggression from Iran? First, it’s not sudden. It’s been brewing for several years—decades, even. Ever since Iran ousted the last Shah of Iran in 1973, it has behaved like a rogue nation, daring the entire world to force them to behave civilly. But Iran self-identifies as a theocracy, striving to return to its ancient roots as the central caliphate in the Middle East.


But Iran’s actions right at this moment are reactionary, not liberal, progressive, or radical. They feel threatened economically and culturally by the severe sanctions against them being enforced from nearly all four corners of the world. Enter Russia. The gap in the wall between corners, the one major country secretly emboldening Iran by violating the sanctions to provide goods and services forbidden to Iran as long as Iran continues to pursue nuclear armaments. Russia views Iran as a useful ally at the moment, but nothing more. In Russia’s view, Iran is a convenient tool with a short-lived purpose.


Enemy of my enemy, my friend—sums up the evolving relationship between Russia and Iran. Russia is suffering under crippling sanctions due to past bad behavior, also.

What does all of this mean for America and our allies, and more importantly, for the entire world busy regaining its economic strength? It means we are under the shadow of looming war, unless Iran can be talked down from the ledge. And don’t look to Russia to help the rest of the world to do that—they are too busy calling out to Iran to jump.


If Iran blocks the Strait of Hormuz with something sudden and irreversible, such as sinking an oil tanker in the deepest, narrow shipping lanes of the 26-mile-wide Strait, one-third of the world’s oil supply (Reuters, 7/5/2018) will be cut off for the short term. But long enough to send the major stock markets worldwide into a frenzy, and enough to skyrocket the price of oil to $200 a barrel within a matter of days, if not hours.


There is a ray of hope, however. Russia can’t hide from the world the fact that it is encouraging Iran’s misbehavior. All, or certainly most, of the developed nations recognize what is going on here: before the oil crash in early 2015, a whopping 70% of Russia’s economy relied on oil exports. If Iran shuts down the Strait of Hormuz, Russia believes the ensuing fire storm will engulf only Iran—leaving Russia free to quickly step in to supply as much of the 33% oil as possible. Russia has no ban on the sale of their oil—at least, not at the present.



If Russia succeeds in goading Iran to cause chaos in the Strait, Putin will learn immediately just how deft Trump is at quashing disasters. Putin doesn’t realize that Trump has been two steps ahead of him since long before Trump took his oath of office. Trump is prepared to counter any brazen actions by Iran, and Trump’s response will not be restricted to just Iran, but to the one leaning out the window yelling “Jump, fool, jump!”

© 2018 by Oil Patch Press