Iraqi Oil: Good Reason For Iranian Closure of the Straits Of Hormuz

Iran is prepared to expand military and security cooperation with neighboring Iraq, a top Iranian military official said -- a week after U.S. forces pulled out of Iraq.

Iraqi crude oil production jumped to the highest level in at least 20 years, or more than 3 million barrels a day, said Hussain al-Shahristani, deputy prime minister for energy affairs.

Predator Drone

Iraq’s government, which takes complete control of the country this month after the withdrawal of U.S. military forces, will acquire unmanned drone aircraft to help protect pipelines and related energy facilities that have been frequent targets of sabotage, he said today in an interview in Baghdad.

Hussain al-Shahristani

He spoke hours after nine bombs exploded in the capital Baghdad, killing at least 57 people in attacks that underscored instability and divisions as the U.S. ends almost nine years of military presence in the country. Iraq holds the fifth-biggest natural-gas reserves in the Middle East and the world’s fifth- largest crude deposits, according to BP Plc data that include Canadian oil sands.

Ever since the U.S invaded Iraq and disposed of its oppressive dictator Saddam Hussein, Iran have been hard at work infiltrating and invading every body part of Iraq like a fast-spreading virus with the intent to fully control all aspect of the nation decision-making and today we are clearly starting to see the end result which entails an Iraqi nation deeply influenced by the Iranian evil regime.

Strait of Hormuz

The Middle East neighbors have enjoyed closer ties in recent years, especially as Iraq's Shia Muslim majority has solidified its power in the absence of former leader Saddam Hussein, a Sunni Muslim. Iran's theocracy is Shia-led.

The development comes as Iran is flexing its naval muscles in the region by staging war games.

The drills are the largest ever planned by Iran and are being staged in an area that stretches from the eastern part of the Strait of Hormuz in the Persian Gulf to the Gulf of Aden, Fars reported last week.

Iranian War Exercises

The maneuvers began on Saturday.

These war games are a warning to western countries about the closure of the Strait of Hormuz, a member of parliament's National Security and Foreign Policy Commission, said Monday. "If any threat is posed to Iran, the Islamic Republic is capable of closing the Strait of Hormuz."

The strait is a narrow shipping channel that leads in and out of the Persian Gulf between Oman and Iran. It is strategically important because oil tankers carrying Middle East oil travel through it.

The U.S. Navy said any attempts to block the Strait of Hormuz would not be tolerated, and a spokesperson for the U.S. Fifth Fleet said that "the free flow of goods and services through the Strait of Hormuz is vital to regional and global prosperity. Anyone who threatens to disrupt freedom of navigation in an international strait is clearly outside the community of nations; any disruption will be an act of economic destabilization.

When asked if the Bahrain-based fleet was taking specific measures to respond to the threat, the spokesperson said the fleet "maintains a robust presence in the region to deter or counter destabilizing activities" but would not provide any further details.






The Iranian threats underline Tehran's concern that the West is about to impose new sanctions that could target the country's vital oil industry and exports.

Western nations are growing increasingly impatient with Iran over its nuclear program. The U.S. and its allies have accused Iran of using its civilian nuclear program as a cover to develop nuclear weapons. Iran has denied the charges, saying its program is geared toward generating electricity and producing medical radioisotopes to treat cancer patients.

The U.S. Congress has passed a bill banning dealings with the Iran Central Bank, and President Barack Obama has said he will sign it despite his misgivings. Critics warn it could impose hardships on U.S. allies and drive up oil prices.

The bill could impose penalties on foreign firms that do business with Iran's central bank. European and Asian nations import Iranian oil and use its central bank for the transactions.

With concern growing over a possible drop-off in Iranian oil supplies, a senior Saudi oil official said Gulf Arab nations are ready to step in if necessary and offset any potential loss of Iranian crude in the world markets.

Iraqi oil will soon be known as Persian Oil Inc.

Reflecting unease over the rising tensions, the U.S. benchmark crude futures contract for February delivery was above $101 per barrel in electronic trading on the New York Mercantile Exchange. Its London-based Brent counterpart fell slightly, but still remained above $109 per barrel on the ICE Futures exchange.

Iran is the world's fourth-largest oil producer, with an output of about 4 million barrels of oil a day. It relies on oil exports for about 80 percent of its public revenues.

Iran has adopted an aggressive military posture in recent months in response to increasing threats from the U.S. and Israel that they may take military action to stop Iran's nuclear program.

The navy is in the midst of a 10-day drill in international waters near the strategic oil route. The exercise involves submarines, missile drills, torpedoes and drones. The war games cover a 1,250-mile stretch of sea off the Strait of Hormuz, northern parts of the Indian Ocean and into the Gulf of Aden near the entrance to the Red Sea as a show of strength and could bring Iranian ships into proximity with U.S. Navy vessels in the area.

Iranian media are describing how Iran could move to close the strait, saying the country would use a combination of warships, submarines, speed boats, anti-ship cruise missiles, torpedoes, surface-to-sea missiles and drones to stop ships from sailing through the narrow waterway.

Iran's navy claims it has sonar-evading submarines designed for shallow waters of the Persian Gulf, enabling it to hit passing enemy vessels.

A closure of the strait could temporarily cut off some oil supplies and force shippers to take longer, more expensive routes that would drive oil prices higher. It also potentially opens the door for a military confrontation that would further rattle global oil markets.