THE REAL END GAME OF IRAN'S HORMUZ STRATEGY
For years, Iran has periodically threatened to close the Strait of Hormuz and even carried out small-scale attacks on shipping operations in the area, as it did recently by mining two oil tankers in the Gulf of Oman. Sidharth Kaushal of The National Interest observes that everyone, including Iran, knows just how incapable Iran actually is of closing the strait. Therefore, one might won-der why Tehran continues to pursue such an ultimately ineffective strategy.
Despite the heated rhetoric between the Iranian regime and President Donald Trump, Iran’s real target may be Europe. The Strait of Hormuz is the busiest oil-shipping chokepoint in the world, with approximately one-third of daily global seaborne shipments of crude (not to mention approximately a quarter of the world’s LNG shipments) passing through it, as depicted in the map below from the U.S. Energy Information Administration. The bulk of these shipments goes not to the U.S. but to Europe (and Asia). To be sure, the U.S. did rely more heavily on the Middle East for oil before 2010, but the domes-tic shale oil boom has helped reduce the share of its imports from that re-gion to 8% today from a peak near 30% in 2006 and made it much less sensi-tive to supply disruptions in the Strait of Hormuz. On the other hand, Euro-stat reports that the E.U.’s dependence on oil imports has risen from 74% in 1995 to almost 90% today. Consequently, Europe is much more economically sensitive to such developments.
Kaushal suggests that, in actuality, Iran may be trying to cause Europe head-ache to secure European support. After withdrawing in May 2018 from the nuclear deal reached in 2015 with Iran and the rest of the “P5+1”—the five permanent members of the U.N. Security Council (U.S., U.K., China, Russia, and France) plus Germany—the U.S. re-imposed sanctions on Iran in Novem-ber 2018, and Iran’s behavior is a clear sign that the sanctions are hurting. Iran’s economy is suffering from recessionary GDP growth, high inflation, and a weakening currency, and its oil production has dropped by roughly 30%, which amounts to a million barrels per day. Furthermore, popular protests against Iran’s leaders have been going on for almost two years and have only intensified over the last year because of the deteriorating conditions.
In the wake of this economic pain, Iran’s plan is apparently to amplify the policy divide between the U.S. and Europe. Oil price spikes due to Iran’s mis-chief in the Strait of Hormuz are meant to get Europe’s attention and obtain greater assurances that Iran’s economic interests will be protected. Similarly, recent reports of Iran’s resumption of uranium enrichment and threats to repudiate the nuclear deal outright seem designed to pressure Europe into giving Tehran more concessions to keep the deal alive. Iran’s hope may be that, by pressuring Europe in this way, it can indirectly influence U.S. behav-ior toward it, for it is well aware that it cannot influence it directly.