FROM: The Philadelphia Inquirer
Here's what to do if Iran really starts to play tough
Well ahead of U.S. diplomatic efforts to sanction it for its nuclear misbehavior, Tehran has two cards up its sleeve that it is threatening to play.
The first is to block the Strait of Hormuz. This could choke off international access to roughly 40 percent of the world's oil exports and produce a worldwide economic disaster. The second is to withdraw from the Nuclear Nonproliferation Treaty, a maneuver that could prompt a cascade of proliferation - starting with Saudi Arabia, Egypt and Turkey - even if Iran never gets the bomb.
What should the United States and its allies do?
First, reduce the vulnerability of energy exports from the Persian Gulf. Oil experts have determined that all but the 2 million to 3 million barrels a day Iran itself ships through the strait could be piped instead to ports on the Red Sea and the Sea of Oman. Pipelines from Iraq, past Kuwait, through Saudi Arabia to the Red Sea, and from the United Arab Emirates and Oman are already in place; they only need to be connected.
This could be done by reopening the Iraqi pipeline to Saudi Arabia that the Saudis seized from Saddam Hussein in 2001 and by stockpiling and producing anti-drag agents - chemical additives that increase the flow of existing oil pipelines as much as 60 percent. It also would require building relatively short spur lines to integrate Omani and UAE pipelines (something now under discussion). Most of this could be completed in 18 months for less than a billion dollars.
With this system in place and adequate floating stocks of oil, the economic impact of an Iranian move to block the strait could be kept to less than what we just suffered from high oil prices.
Second, make sure that if the Strait of Hormuz is blocked, the pain falls mainly on Iran. About 80 to 90 percent of Iran's foreign export earnings and roughly 75 percent of its revenues depend on Iranian oil getting through the strait. Iran is reported to have roughly $50 billion in foreign cash reserves. Some believe this is enough to keep the regime (and the 100 elite families that run it) operating for one to two years. But if the U.S. Treasury and allied financial ministries act in concert, it is unclear how much of this money Iran would have access to.
Assume the world's strategic oil reserves grow (the United States alone has 687 million barrels, and our key allies are not far behind). Allow a decline in oil demand due to higher prices, a million barrels a day of surplus pumping capacity in Saudi Arabia and elsewhere, and Tehran's influence over gulf oil commerce wanes dramatically. The United States and its friends could gain the upper hand over oil flowing through the strait and even threaten the mullahs' true power base - oil export revenue.
To increase this prospect's likelihood, the United States and its allies could also gradually increase their air and naval presence in the gulf. One nonprovocative way to do this would be to augment those international forces already deployed to prevent drug and slave trading, terrorist transit, and smuggling. Russia and China (whose naval forces cannot compare to those of the United States and its allies), may complain, but most of NATO's navies and those of smaller states such as New Zealand are actively supporting these operations, as are several of the gulf states, including Iran.
Finally, hem Iran in with country-neutral nonproliferation restraints. France has recommended that if states violate their inspection obligations under the Nuclear Nonproliferation Treaty and withdraw, they ought to be held responsible for their transgressions. France also favors a proposal to prohibit states that violate these obligations from making nuclear fuel for a decade and to require that they allow intrusive wide-area surveillance inspections as provided under the International Atomic Energy Agency's Additional Protocol - an agreement Iran has signed. Washington should back these ideas, along with creating an IAEA wide-area surveillance unit (a $10 million to $30 million-a-year proposition). Such inspections, assuming Iran allowed them, would hardly be foolproof, but they could help slow and ferret out Iran's illicit nuclear activities.
Certainly, if we took all these steps, Tehran would hold far fewer cards. More important, we could beat them at their own game.