Iran could block off major oil transit chokepoint Strait of Hormuz

Satellite view of the Strait of Hormuz

Satellite view of the Strait of Hormuz

The United States believes Iran is preparing to carry out a major exercise in the Gulf in the coming days, apparently moving up the timing of annual drills amid heightened tensions with Washington, U.S. officials told Reuters on Wednesday.

The name of the body of water separating the Iranian plateau from the Arabian Peninsula, is historically and internationally known as the Persian Gulf, named after the land of Persia or Iran.

"We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce", said a statement by Navy Capt. Bill Urban, U.S. Central Command spokesman.

While the impending large Iranian military exercise has United States officials concerned, experts believe Tehran is most likely bluffing that it would ever close the strait. "We are monitoring it closely and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in global waterways".

This is likely in response to America's expansion of its sanctions against Iran scheduled to come into force on August 6.

"It seems President Trump has been taken hostage by Saudi Arabia and a few producers when they claimed they can replace 2.5 million barrels per day of Iranian exports, encouraging him to take action against Iran", Iran's OPEC governor Hossein Kazempour Ardebili told Reuters this week.

The Strait of Hormuz accounts for 20 per cent of the world's oil transportation, making it the most important oil transit point in the world.

It appears as many as 100 small Iranian craft are prepared to participate in the exercise, officials said. According to a us official who spoke to Reuters last month, Washington has also launched a media campaign to spur the protests on and undermine the influence of the Iranian leadership, but some familiar with Iranian politics argue that this will have a boomerang effect.

US Defense Secretary James Mattis said on Friday, "Iran has threatened to close the Strait of Hormuz".

Trump announced the USA was leaving the agreement in May.

The main factor that will keep Iranian oil on the market is how successful Tehran is in convincing Asian buyers to purchase more Iranian crude oil, ING commodities strategist Warren Patterson said in mid-July. Both countries have asserted the right for decades to block warships whose use of the waterway they don't consider to be "innocent passage", and Iran annually holds exercises in the strait.

Saudi Arabia, Israel, the U.S. and others have long accused Tehran of pulling the strings of the Houthis, and Israeli officials promised a military response if Iran shuts down either the Strait of Hormuz or the Straits of Bab al-Mandeb.

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