Iran’s Threat to the Strait of Hormuz

Congressional research reportJan 23, 2012

Ask Donna

What actually matters in this document.

Text

-name redacted-, Coordinator

Specialist in Middle Eastern Affairs

-name redactedSpecialist in Energy Policy

-name redactedSpecialist in Naval Affairs

-name redactedLegislative Attorney

-name redactedSpecialist in Energy Policy

January 23, 2012

Congressional Research Service

7-....

www.crs.gov

R42335

CRS Report for Congress

Prepared for Members and Committees of Congress

Iran’s Threat to the Strait of Hormuz

Summary

Some officials of the Islamic Republic of Iran have recently renewed threats to close or exercise

control over the Strait of Hormuz. Iran’s threats appear to have been prompted by the likely

imposition of new multilateral sanctions targeting Iran’s economic lifeline—the export of oil and

other energy products. In the past, Iranian leaders have made similar threats and comments when

the country’s oil exports have been threatened. However, as in the past, the prospect of a major

disruption of maritime traffic in the Strait risks damaging Iranian interests. U.S. and allied

military capabilities in the region remain formidable. This makes a prolonged outright closure of

the Strait appear unlikely. Nevertheless, such threats can and do raise tensions in global energy

markets and leave the United States and other global oil consumers to consider the risks of

another potential conflict in the Middle East. This report explains Iranian threats to the Strait of

Hormuz, and analyzes the implications of some scenarios for potential U.S. or international

conflict with Iran. These scenarios include

•

Outright Closure. An outright closure of the Strait of Hormuz, a major artery of

the global oil market, would be an unprecedented disruption of global oil supply

and contribute to higher global oil prices. However, at present, this appears to be

a low probability event. Were this to occur, it is not likely to be prolonged. It

would likely trigger a military response from the United States and others, which

could reach beyond simply reestablishing Strait transit. Iran would also alienate

countries that currently oppose broader oil sanctions. Iran could become more

likely to actually pursue this if few or no countries were willing to import its oil.

•

Harassment and/or Infrastructure Damage. Iran could harass tanker traffic

through the Strait through a range of measures without necessarily shutting down

all traffic. This took place during the Iran-Iraq war in the 1980s. Also, critical

energy production and export infrastructure could be damaged as a result of

military action by Iran, the United States, or other actors. Harassment or

infrastructure damage could contribute to lower exports of oil from the Persian

Gulf, greater uncertainty around oil supply, higher shipping costs, and

consequently higher oil prices. However, harassment also runs the risk of

triggering a military response and alienating Iran’s remaining oil customers.

•

Continued Threats. Iranian officials could continue to make threatening

statements without taking action. This could still raise energy market tensions

and contribute to higher oil prices, though only to the degree that oil market

participants take such threats seriously.

If an oil disruption does occur, the United States has the option of temporarily offsetting its

effects through the release of oil from the Strategic Petroleum Reserve. Such action could be

coordinated with other countries that hold strategic reserves, as was done with other members of

the International Energy Agency after the disruption of Libyan crude supplies in 2011.

Iran’s threats suggest to many experts that international and multilateral sanctions—and the

prospect of additional sanctions—have begun to affect its political and strategic calculations. The

threats have been coupled with a publicly announced agreement by Iran to resume talks with six

countries on measures that would assure the international community that Iran’s nuclear program

is used for purely peaceful purposes. Some experts believe that the pressure on Iran’s economy,

and its agreement to renewed talks, provide the best opportunity in at least two years to reach

agreement with Iran on curbing its nuclear program.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

Contents

Geopolitical Considerations............................................................................................................. 1

Context and Possible Causes of Iran’s Threats.......................................................................... 1

Iran’s Intent to Implement Its Threats ....................................................................................... 4

Iran’s Capabilities to Implement Its Threat ............................................................................... 4

Scenarios for Long Term Low-Intensity Conflict in the Gulf ................................................... 6

Potential Diplomatic Resolution of the Iranian Threat.............................................................. 8

Potential Military Response ...................................................................................................... 8

U.S. Statements of Intent..................................................................................................... 8

U.S. Confidence in Its Ability to Keep the Strait Open....................................................... 9

Potential U.S. and Coalition Military Responses .............................................................. 10

Oil Market Considerations............................................................................................................. 13

Conclusion............................................................................................................................... 15

Figures

Figure 1. Persian Gulf and the Strait of Hormuz ............................................................................. 3

Tables

Table 1. Selected Iran-Related Events and Oil Price Changes ...................................................... 17

Appendixes

Appendix. Legal Framework Applicable to International Straits .................................................. 18

Contacts

Author Contact Information........................................................................................................... 20

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

Geopolitical Considerations

From December 2011 to January 2012, some Iranian government officials openly threatened to

close the Strait of Hormuz, a major artery of the global oil market, if sanctions are imposed on

Iran’s oil exports. Iran’s first Vice President Mohammad Reza Rahimi first stated that threat on

December 28, 2011. Various Iranian naval and other commanders restated and in some cases

changed the threat somewhat. For example, on January 3, 2012, the commander of Iran’s regular

army, Ataollah Salehi, warned the United States not to return the departing U.S.S. John Stennis

aircraft carrier to the Gulf.1 Perhaps recognizing the potential for conflict with superior U.S.

forces, a few Iranian figures, including regular Navy commander Habibollah Sayyari, issued

statements downplaying or softening the warnings and threats.2 The Iranian threats were issued

during “Velayat 90,” naval exercises held from December 23, 2011, to January 2, 2012, which

culminated with the test firing of Iran-made surface-to-surface missiles. Oil exports are critical to

Iran, providing 76% of export earnings and 62% of government revenues.3 Many experts see

Iran’s warnings as a reiteration of its long held position to defend these exports.

Context and Possible Causes of Iran’s Threats

Iran’s threats occurred as it faced increasing likelihood that multilateral sanctions would be

adopted that could reduce Iran’s oil export earnings. Previously, United Nations and multilateral

sanctions had sought to reduce Iran’s ability to develop its nuclear program by undermining its

ability to develop its energy sector—targeting investment and financial linkages—but not directly

targeting Iran’s ability to export oil.4

•

Following a report by the International Atomic Energy Agency (IAEA) on

November 8, 2011,5 which presented information that Iran had researched

nuclear weapons designs in the past, the United States, Britain, and Canada took

additional steps to shut Iran out of the international banking system.

•

Iran reacted by expelling the British Ambassador to Iran. Then, on November 29,

2011, a mob ransacked the British Embassy in Tehran with the widely reported

support of Iran’s internal security force, the Basij militia. That action led to the

closure of the Iranian and British embassies in London and Tehran, respectively.

•

These events occurred at the same time Congress was completing action on the

FY2012 National Defense Authorization Act (P.L. 112-81), containing a

provision to sanction foreign banks that do business with Iran’s Central Bank.

Iran’s Central Bank is the prime conduit through which buyers pay Iran for oil.

That bill was signed into law on December 31, 2011.

J. David Goodman. “Iran Warns U.S. Aircraft Carrier Not to Return to Gulf and a Strategic Strait.” New York Times,

January 4, 2012.

Ramin Mostafavi. “Iran Test-Fires Missiles in Gulf Exercise.” Reuters, January 2, 2012.

For fiscal year 2009/10. International Monetary Fund, Staff Report for the 2011 Article IV Consultation—Islamic

Republic of Iran, July 5, 2011, p. 28, http://www.imf.org/external/pubs/ft/scr/2011/cr11241.pdf.

Import of Iranian oil into the United States has been prohibited by U.S. law since 1995, but measures to end or reduce

imports in Europe and other major markets are new.

Implementation of the NPT Safeguards, http://isis-online.org/uploads/isis-reports/documents/

IAEA_Iran_8Nov2011.pdf.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

•

The attack on British diplomatic property caused the EU to consider an embargo

on purchases of Iranian oil, which was agreed to by EU foreign ministers on

January 23, 2012.

The Strait of Hormuz

The Strait of Hormuz is the narrow waterway that forms the entrance to the Persian Gulf from the

Gulf of Oman and ultimately the Arabian Sea. At its narrowest point it is 22 nautical miles wide

and falls within Iranian and Omani territorial waters. There are two shipping lanes through the

Strait, one in each direction. Each is two miles wide and they are separated by a two-mile buffer.

See Figure 1.

Congressional Research Service

Figure 1. Persian Gulf and the Strait of Hormuz

Source: Jacqueline Nolan, Library of Congress, with data from Petroleum Economist, National Oceanic and Atmospheric Administration, and Central Intelligence Agency.

CRS-3

Iran’s Threat to the Strait of Hormuz

Iran’s Intent to Implement Its Threats

Most observers believe that Iran, because of its own dependence on commerce through the Strait,

intends to shape the international debate on Iran policy rather than to actually attempt to close the

waterway. Oil exports are vital to the Iranian government’s fiscal health and the Iranian economy

as a whole. Iran relies on the Strait not only for its oil exports, but also for the shipment of some

needed food and medical products, although Iran could attempt to re-route imports through ports

outside the Strait, such as Jask, or with established overland trade routes through Pakistan or Iraq.

This implies that the likelihood that Iran might attempt to close the Strait increases if a broad

embargo on purchases of Iran’s oil emerges. At its January 23, 2012, meeting, the EU agreed to

an embargo to take full effect by July 1, 2012. This EU move might remove what may be the

most important factor restraining Iran from taking that step at this time. As a result of the EU

decision, some Iranian leaders immediately reiterated the threat to the Strait. Some others

threatened to immediately cut off exports to the EU and thereby deny the EU time to identify

alternative suppliers.

Iran also may fear—and U.S. statements and actions seem to justify such a fear—that closing the

waterway would provoke all-out conflict with the United States (see “U.S. Statements of Intent”

below). Iran might be concerned that such a conflict would lead to U.S. military action not just to

reopen the Strait but also to destroy its military and nuclear infrastructure.

Further, by threatening traffic through the Straits, Iran may risk alienating other nations, including

its neighbors and customers. Most of the oil from the Persian Gulf goes to Asian nations. China is

Iran’s largest customer and Iran is China’s third largest source of oil imports. In the wake of

threats from Iran, China quickly dispatched Vice Foreign Minister Zhai Jun to Tehran,

presumably to try to persuade Iran to withdraw its threats.6 Chinese and Indian officials have

indicated their countries will continue to buy Iranian crude.7 However, according to reports,

difficulties with payment terms have led to a reduction in Chinese import of Iranian crude in early

2012.8

Iran’s Capabilities to Implement Its Threat

In assessing Iran’s capabilities to close the Strait, Chairman of the Joint Chiefs of Staff Martin

Dempsey said on January 8, 2012, that

[The Iranians have] invested in capabilities that could, in fact, for a period of time block the

Straits of Hormuz. We’ve invested in capabilities to ensure that, if that happens, we can

defeat that. And so the simple answer is, yes, they can block it.9

Iran’s naval capabilities are divided among the two main branches of its armed forces – the

regular Islamic Republic of Iran Navy (IRIN, regular Navy), a holdover of the military of the

Michael Singh, The Real Iranian Threat in the Gulf, January 3, 2012, http://www.washingtoninstitute.org/

templateC06.php?CID=1789.

Mari Iwata, “Japan Urges U.S. to Include China, India in Iran Sanctions,” Wall Street Journal, January 18, 2012.

Chen Aizhu, “China extends Iran oil import cut as sanctions mount,” January 5, 2012.

Comments by Joint Chiefs Chairman Dempsey on CBS TV program “Face the Nation,” January 8, 2012.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

former Shah of Iran, and the Islamic Revolutionary Guard Corps Navy (IRGC Navy). The IRIN

controls the larger coastal combatant ships such as six Corvette-class (i.e., light frigate) ships. It

also operates Iran’s three Kilo-class submarines purchased in the 1990s from Russia. The more

politically powerful IRGC Navy is a branch of the IRGC, which is considered allied to Iran’s

hardliners and which plays a role in internal security and support for pro-Iranian movements in

the Middle East. The IRIN, with its larger ships, has been assigned to patrol the more open waters

of the Gulf of Oman; the IRGC Navy, with its lighter fleet, is assigned to close-in waters of the

Strait of Hormuz and Persian Gulf. As a hallmark of its role as guardian of the Islamic revolution,

the IRGC Navy has long been perceived as more willing to undertake operations not fully vetted

by senior political leaders, whereas the IRIN is considered more traditional and restrained in its

approach.

Through new purchases and tactics adopted since the 1980-1988 Iran-Iraq war, Iran’s naval forces

have developed a clear asymmetric warfare capability intended to use Iran’s long coast to

frustrate larger adversaries. Among other specific capabilities in Iran’s inventory are:10

•

Mines. Iran is believed to possess as many as 5,000 mines of different types,

including moored mines, advanced mines such as the MDM-3 that can be

dropped from aircraft, and other types.11 Detecting and clearing mines once they

have been placed in the water can be difficult and time-consuming task. Mineclearing operations could be made more challenging if they are undertaken while

U.S. and coalition forces are also attempting to counter other Iranian forces, such

as speed boats, mini-submarines, and shore-based cruise missiles. U.S. and

coalition forces might choose to suppress other threats before starting mineclearing operations. This could reduce the risk to mine-clearing forces, but

lengthen the total timeline for clearing the Gulf of mines.

•

Small Boats. The IRGC Navy is perceived as a greater threat for “asymmetric

warfare” because of its small fleet and unconventional tactics, such as

“swarming,” which it has developed since the end of the Iran-Iraq war in 1988.

Swarming is characterized by deployment of dozens, or perhaps even hundreds

of cruise-missile or other armed small boats, launched from different bases, to

converge on and attack a discreet target such as a warship or oil tanker.12

Numerous U.S. observers are particularly concerned about the use of such tactics,

particularly in the relatively close confines of the Strait of Hormuz.13 To carry out

Some of the capabilities in which Iran has invested are discussed in various military-related journals, such as “The

Military Balance: 2011,” published by the International Institute of Strategic Studies in Britain. Additional detail is

provided in an unclassified study by the Office of Naval Intelligence, “Iran’s Naval Forces: From Guerrilla Warfare to

a Modern Naval Strategy,” Fall 2009.

Tony Capaccio, “Keeping Strait Open to Get Tougher as Iran Expands Forces,” Bloomberg News, January 18, 2012.

For more information, see Fariborz Haghshenass, “Iran’s Doctrine of Asymmetric Naval Warfare,” Washington

Institute for Near East Policy, PolicyWatch 1179, December 21, 2006. http://www.washingtoninstitute.org/

templateC05.php?CID=2548

See, for example, Michael Rubin, “Dire Straits,” Weekly Standard, January 16, 2012. One observer has taken an

opposing view, stating:

The IRGCN small-boat threat is largely unchanged [since the U.S.-Iranian naval clashes of the

1980s] and can be successfully countered.

The IRGCN tactics and command-and-control abilities to execute small-boat attacks have not

changed significantly. Iran has not displayed credible command-and-control to employ swarms of

small boats effectively, other than in staged exercises, and the IRGCN does not usually deploy

(continued...)

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

this tactic, among others, the IRGC Navy controls a large number of generally

smaller ships of many different classes. These include 10 China-supplied

Hudong-class missile patrol boats bought in the 1990s and equipped with C-802

sea-skimming cruise missiles; 9 C-14 missile boats, also made by China and

received in 2006; another China-made boat, the MK-13 patrol craft that can be

armed with cruise missiles and torpedoes; about 40 Iran-made patrol craft called

the PEYKAAP; and 30-40 Swedish-made Boghammer fast-patrol boats. Iran also

has an unspecified number of small boats designed in Italy (Fabio Buzzi Design)

but made in Iran itself.

•

Submarines. Torpedoes launched from Iran’s three Kilo-class submarines or its

up to nearly a dozen mini or midget submarines could inflict potentially

devastating damage on a warship, as shown by the March 2010 sinking of the

South Korean corvette Cheonan by a torpedo that South Korea, United States,

and other countries concluded was fired by a North Korean mini-submarine.

Iran’s decision to base its three Russian-made Kilo-class submarines outside the

Strait of Hormuz suggests that the ships would be used during a confrontation to

threaten surface ships operating in the Gulf of Oman.

•

Coastal Cruise Missiles. The IRGC Navy controls several batteries of CSS-C-2

“Seersucker” and China-made C-801 and C-802 anti-ship missiles emplaced

along Iran’s coast. These missiles can be readily deployed anywhere along the

Iranian coast. Lebanese Hezbollah, which is supported and armed by Iran, used a

C-802 to severely damage an Israeli naval vessel in the 2006 Israel-Hezbollah

war.

Scenarios for Long Term Low-Intensity Conflict in the Gulf

Rather than close the Strait outright, some experts believe that it is more likely that Iran would

use the capabilities discussed to disrupt, threaten, harass, and otherwise create substantial

instability for shipping in the Gulf. Similar to attempting to close the Strait, employing these lowintensity tactics and operations could be intended to cause the United States and its partners to

think twice about increasing economic, diplomatic, or military pressure against Iran.

(...continued)

more than three to five boats together. The machine guns and rocket launchers deployed on its

small-boat fleet remain highly inaccurate to hit anything but a lumbering, unmaneuverable

supertanker.

In previous engagements, the U.S. military has dominated Iranian small boats. Even conventional

combatants such as the cruiser Vincennes, in its firefight with Iranian small boats in July 1988,

showed that the five-inch guns could strike IRGCN boats before they could get close enough to fire

their rockets and machine guns. Naval Special Warfare Mark V and Special Operations Craft–

Riverine (SOC–R) patrol boats, along with armed Coast Guard vessels, are more than a match for

the IRGCN small boats. U.S. Special Warfare sailors are better trained and disciplined than IRGCN

personnel. A firefight between small boats of these opposing forces would be a one-sided

engagement.

(David B. Crist, Gulf of Conflict: A History of U.S.-Iranian Confrontation at Sea, Washington

Institute for Near East Policy, June 2009 (Policy Focus #95), pp. 30-31.)

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

Iran might begin with a less violent option and progress over time to more violent ones, or

implement a combination of highly violent options from the outset. Potential options available to

Iran include but are not limited to the following, which are listed in no particular order:

•

Declaring that the Strait of Hormuz or other parts of the Gulf are closed to

shipping, without stating explicitly what the consequences might be for ships that

attempt to transit those waters.

•

Declaring more explicitly that ships transiting the Strait or other parts of the Gulf

are subject to being intercepted and detained, or attacked.

•

Using speed boats, other surface craft, or aircraft to harass, block the path of, or

fire warning shots at ships transiting the Strait or other parts of the Gulf.

•

Using the above assets, and perhaps also shore-based rockets, artillery, and cruise

missiles, mini-submarines, or swimmers, to selectively or more systematically

attack selected ships transiting the Strait or other parts of the Gulf.

•

Mining the Strait and perhaps other parts of the Gulf.

•

Declaring that foreign naval ships operating in certain waters outside the Strait

(i.e., in the Gulf of Oman) will be subject to attack.

•

Using submarines, surface ships, shore-based cruise missiles, and aircraft to

attack foreign naval ships operating in waters outside the Strait.

In response to subsequent U.S. and coalition military actions to keep the Gulf open, Iran’s list of

potential options would expand to include using theater ballistic missiles, submarines,

commandos, or aircraft to attack military or economic land targets on the western side of the

Gulf, and perhaps ordering terrorist attacks against targets both in the Persian Gulf region and

beyond.

There is precedent for many of the scenarios discussed above. Iran used many of these tactics

during the 1980-1988 Iran-Iraq war in an effort to respond to Iraq’s conventional air superiority

and to the perceived U.S. alignment with Iraq in that war. Iran laid mines in the Gulf to disrupt

tanker traffic and used Chinese-made Silkworm cruise missiles to damage oil tankers and oil

loading facilities. These actions prompted U.S. operation Earnest Will (July 1987-September

1988), to reflag and militarily escort through the Gulf Kuwaiti oil tankers and to de-mine the

Gulf. When a mine struck the U.S.S. Samuel B. Roberts on April 14, 1988, it prompted the U.S.

to launch operation Praying Mantis (April 18, 1988), in which the U.S. Navy attacked two Iranian

oil platforms. Iran attempted a retaliatory assault on U.S. naval forces in the Gulf which resulted

in the destruction of about 25% of Iran’s conventional naval fleet. Iran also had one failed attempt

to use “swarming” tactics—that time against a fixed infrastructure target—in October 1987: Iran

sent a flotilla of about 60 small boats to attack the Saudi-Kuwaiti offshore oil terminal at Khafji,

but was turned back by Saudi Arabia’s air force. The Saudis reportedly were alerted to the attack

by the United States.

Later, in the mid-1990s, Iran raised substantial U.S. and Gulf state concerns by building up

troops, artillery, cruise missiles, and anti-aircraft artillery on islands in the Gulf, including those it

has seized from the United Arab Emirates.14 More recently, in March 2007, Iran seized and held

For a discussion of the crisis created by this buildup, see CRS Report 95-572, Iranian Military Buildup: What Sort of

Threat to Persian Gulf Oil Supply? by Lawrence C. Kumins and (name redacted), May 1, 1995 (out of print;

(continued...)

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

for about two weeks a group of British marines whose ship Iran said had wandered into its

territorial waters—an assertion denied by Britain.

Potential Diplomatic Resolution of the Iranian Threat

Resumed multilateral nuclear talks could provide a diplomatic means to reduce any threat Iran

posed to traffic through the Strait. Since 2006, Iran has negotiated with six countries—the socalled “P5+1,” permanent U.N. Security Council members plus Germany—to identify steps that

could assure the international community that Iran’s nuclear program is purely peaceful. The last

round of talks was held in January 2011, and made virtually no progress, contributing to

subsequent U.S. and EU decisions to add sanctions against Iran.

Recently, Iran has shown interest in resuming nuclear talks, perhaps in an attempt to head off

broadening sanctions. On December 31, 2011, Iran’s chief nuclear negotiator, Seyed Jallili, stated

that Iran would respond positively to an October 2011 letter by EU foreign policy director

Catherine Ashton to enter a new round of nuclear negotiation. However, and despite comments by

Iranian President Mahmud Ahmadinejad on January 26, 2012 welcoming new talks, no formal

response has been sent and no talks are scheduled. Progress on these talks could motivate the EU

to weaken sanctions, which in turn could reduce Iran’s motivation to threaten traffic through the

Strait. As a further sign of conciliation, Iran allowed an International Atomic Energy Agency team

to visit Iran to discuss Iran’s past work on a nuclear explosive device. The visit occurred during

January 29-31, 2012. These issues are discussed in greater detail in CRS Report RS20871, Iran

Sanctions, by (name redacted).

Potential Military Response

U.S. Statements of Intent

U.S. officials have stated that the United States would not tolerate an attempt by Iran to close the

Strait, and would respond by taking action to reopen the waterway:

•

On December 28, 2011, a spokeswoman for the U.S. Navy’s 5th Fleet, which is

responsible for the Persian Gulf region, stated, “Anyone who threatens to disrupt

freedom of navigation in an international strait is clearly outside the community

of nations; any disruption will not be tolerated.”15 That same day, DOD press

secretary George Little reportedly stated “Any attempt to close the strait will not

be tolerated.”16

•

On January 8, 2012, in an interview on the CBS television show Face The

Nation, Secretary of Defense Leon Panetta stated, “We have made very clear that

the United States will not tolerate blocking of the Straits of Hormuz. That’s

(...continued)

available from the author upon request).

Barbara Starr and Phil Gast, “U.S. Navy Won’t Tolerate ‘Disruption’ Through Strait of Hormuz,” CNN.com,

December 29, 2011; Thomas Erdbrink, “Iran Seen As Unlikely To Close Hormuz Strait,” Washington Post, December

29, 2011: 8; Mark Thompson, “Can Iran Close The Strait of Hormuz” Battleland.Blogs.Time.com, December 28, 2011.

Farnaz Fassihi, “U.S. Warns Tehran On Strait,” Wall Street Journal, December 29, 2011: 8.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

another red line for us—and that we will respond to that.” In the same interview,

General Martin Dempsey, the Chairman of the Joint Chiefs of Staff, stated, that

“we’ve described that as an intolerable act. And it’s not just intolerable for us. It’s

intolerable to the world. But we would take action and reopen the straits.”17

•

On January 13, 2012, it was reported that “The Obama Administration is relying

on a secret channel of communication to warn Iran’s supreme leader, Ayatollah

Ali Khamenei, that closing the Strait of Hormuz is a ‘red line’ that would

provoke an American response....”18

Although U.S. statements have addressed Iran’s threat to close the Strait outright, it is widely

assumed by experts and observers that the United States will act against Iranian efforts to harass

or interfere with the free flow of commerce in the Strait in such scenarios discussed above. As

noted previously, the United States skirmished with Iran repeatedly during 1987-88 on occasions

where Iran sought to interfere with international shipping but did not try to close the Strait

outright.

U.S. Confidence in Its Ability to Keep the Strait Open

There appears to be a general consensus among observers who track Iran’s armed forces that Iran

has the military capacity—using mines, speed boats, submarines, shore-based cruise missiles,

aircraft and other systems—to disrupt the flow of commercial shipping into and out of the Persian

Gulf. There also appears to be a consensus that the U.S. military, acting alone or with coalition

partners, has the capacity to then counter Iran’s forces and restore the flow of shipping, but that

the effort would likely take some time—days, weeks, or perhaps months—particularly if a large

number of Iranian mines needed to be cleared from the Gulf. However, U.S. forces are

presumably monitoring for mine deployment and may interrupt such an initiative by Iran before a

large number of mines were able to be deployed. This in turn runs the risk of leading to more

extensive military engagement.

A January 13, 2012, press report stated, “Estimates by naval analysts of how long it could take for

American forces to reopen the strait range from a day to several months, but the consensus is that

while Iran’s naval forces could inflict damage, they would ultimately be destroyed.”19 A January

5, 2012, press report states that “Should Iran’s rulers ever make good their threats to block the

Straits of Hormuz, they could almost certainly achieve their aim within a matter of hours. But

they could also find themselves sparking a punishing—if perhaps short-lived—regional conflict

from which they could emerge the primary losers.... Few believe Tehran could keep the straits

closed for long—perhaps no more than a handful of days....”20 A December 29, 2011, press report

states that “Iran can disrupt traffic through the Strait of Hormuz but probably cannot completely

shut down the world’s most important oil route, military analysts say.... What the Iranians can do

... is harass traffic through the Gulf—anything from stopping tankers to outright attacks. The goal

Source: Transcript of interview with Secretary Panetta and General Dempsey, Face The Nation (CBS), January 8,

2012. Panetta said this was “another” red line because earlier in the interview, he identified the development by Iran of

a nuclear weapon as a red line.

Elisabeth Bumiller, Eric Schmitt, and Thom Shanker, “U.S. Sends Top Iranian Leader a Warning on Strait Threat,”

New York Times, January 13, 2012: 1.

Ibid.

Peter Apps, “Iran Could Close Hormuz—But Not For Long,” Reuters.com, January 5, 2012.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

would be to panic markets, drive up shipping insurance rates and spark a rise in world oil prices

enough to pressure the United States to back down on sanctions.”21

An Iranian attempt to close the Gulf to shipping could take many forms, as could a U.S. and

coalition military response. In a military confrontation between Iran and the United States and

other countries over the flow of shipping into and out of the Gulf, events could unfold and

culminate rapidly, within a few hours or days, or more slowly, over a period of weeks or months.

There might be multiple rounds of Iranian initiatives and U.S. and coalition responses, with

quieter periods in between. During these events, there might be few or no moments when the Gulf

is fully closed (i.e., no ships entering or leaving) or fully open (i.e., ships entering or leaving with

no risk of Iranian harassment or attack). The confrontation would carry a risk of escalating to a

wider military conflict between Iran and the United States and coalition partners.

The possibility of conflict with Iran complicates U.S. defense policy just weeks after completing

a U.S. troop pullout from Iraq and the announcement of a new defense guidance predicated on

shrinking resources. The new guidance includes an increased emphasis on the Asia-Pacific region

but also states that the U.S. military will invest in capabilities required to operate effectively

against any moves by actors such as Iran or China to counter U.S. power-projection capabilities.

Potential U.S. and Coalition Military Responses

It is possible that U.K. forces would join U.S. forces in responding militarily to an Iranian attempt

to close the Gulf. The U.K.’s Secretary of Defense, Philip Hammond, stated in early January 2012

Lee Keath, “Closing Strait A High Cost For Iran,” ArmyTimes.com, December 29, 2011. See also Mark Thompson,

“Can Iran Close The Strait of Hormuz” Battleland.Blogs.Time.com, December 28, 2011, which quotes a 2008 Naval

War College study by Navy Commander Rodney Mills as stating:

There is consensus among the analysts that the U.S. military would ultimately prevail over Iranian

forces if Iran sought to close the strait. The various scenarios and assumptions used in the analyses

produce a range of potential timelines for this action, from the optimistic assessment that the straits

would be open in a few days to the more pessimistic assessment that it would take five weeks to

three months to restore the full flow of maritime traffic.

A September 2011 report from CNA (Center for Naval Analyses) stated:

A detailed analysis of this question was conducted by [Caitlin] Talmadge using a scenario in which

Iran was able to lay several hundred mines in the Strait and the Persian Gulf. In her analysis,

Talmadge assumes the U.S. considers its mine countermeasure (MCM) forces too vulnerable and

scarce to use in a hostile environment, and so would instead wait to use them until it had essentially

eliminated the threat from [antiship cruise missiles] ASCMs. Using a technical analysis of U.S. air

and Iranian ASCM and air-defense capabilities, she concluded it could take between 9 and 72 days

for the U.S. to do so. Using mine-clearance rates based on previous efforts in the Persian Gulf (e.g.,

Operation Candid Hammer), she concluded it would take between 28 and 40 days to adequately

clear the minefields. Putting these two timelines together, she concluded overall that it could take

37 to 112 days for the U.S. to reopen the Strait under such a scenario. Many of her assumptions

regarding Iranian capabilities were subsequently disputed as giving the Iranians too much credit,

but the disputer did not rule out completely the capability of Iran to threaten the Strait.

(Jonathan Schroden, A Strait Comparison: Lessons Learned from the 1915 Dardanelles Campaign

in the Context of a Strait of Hormuz Closure Event, CNA (Center for Naval Analyses), September

2011, pp. 38-39. The analysis by Talmadge cited in the CNA report is: Caitlin Talmadge. “Closing

Time: Assessing the Iranian Threat to the Strait of Hormuz,” International Security, Summer 2008:

82-117. The CNA report cites the following source for the subsequent dispute over Talmadge’s

assumptions regarding Iranian capabilities: William D. O’Neil and Caitlin Talmadge. “Costs and

Difficulties of Blocking the Strait of Hormuz,” International Security, Winter 2008/09: 190-198.)

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

that “Disruption to the flow of oil through the Strait of Hormuz would threaten regional and

global economic growth. Any attempt by Iran to do this would be illegal and unsuccessful.”22

Since that statement, Britain reportedly has sent additional warships to the Gulf to augment U.S.

capabilities there.

Other potential coalition partners would include other western allies and the Gulf Cooperation

Council states. Asian oil consumers have also signaled their discomfort with the prospect of

disruption and could take a negative stance against any Iranian action to disrupt or close the

Strait.

U.S. and coalition military actions would likely be tailored to a large degree on the exact nature

of Iran’s actions. U.S. and coalition forces could clear mines, organize convoys or establish a

protected shipping corridor, and defend ships against Iranian attacks without attacking Iranian

targets ashore. A broader alternative would be to extend operations to include air strikes against

shore-based Iranian anti-ship weapons and supporting surface-to-air missile batteries, radars, and

command-and-control facilities. A still-broader alternative would be to extend options further, to

include strikes against shore-based Iranian military assets that are not involved in Iran’s effort to

close the Gulf, including, potentially, targets believed to be associated with the development of an

Iranian nuclear weapon capability. U.S. and coalition forces could attack Iranian anti-shipping

assets only after Iran has used them to attack ships, or attack those assets preemptively. Attacks

could be concentrated against assets of the IRGC, which has primary responsibility for the

Persian Gulf within Iran’s military establishment, or be spread more broadly to also include assets

of Iran’s state armed forces.23

James Blitz, “UK Warns Iran Over Hormuz Threat,” Financial Times, January 5, 2012: 5. See also Thomas Harding,

“Navy Sends Top Warship To Gulf As Iran Threatens To Block Key Oil Route,” London Daily Telegraph, January 7,

2012, and Keith Johnson, “Threat By Iran Adds To Specter Of Conflict In Oil Lane,” Wall Street Journal, January 7,

2012: 8.

A 2009 study that reviewed U.S.-Iranian naval clashes in the Gulf in the 1980s stated:

The United States must be prepared for robust retaliation should an asymmetrical attack in a future

regional conflict escalate (or if the IRGCN decides to employ its missile boats) and a larger

response becomes necessary. Such a response should come in the form of a series of targeting

packages based upon graduated response options, ranging from IRGC targets only to more

expansive attacks on Iran’s military infrastructure.

A key question with no historical precedent is how Iran would respond to an attack on its mainland,

either in response to a provocation or to destroy its nuclear weapons capability. During Operation

Earnest Will, CENTCOM developed a series of scaled military options. The commander, Gen.

George Crist, recommended as a first option attacking targets that facilitated Iran’s ability to

sustain its operations in the Gulf. He proposed seizing one or all of the islands of Farsi, Sirri, or

Abu Musa, as well as destroying the oil platforms Iran used to collect intelligence and command

the IRGCN. In a memo for the chairman of the Joint Chiefs, the CENTCOM commander said he

wanted to “deny their eyes and forward staging bases within the Gulf.” Iran would then be forced to

sortie from its mainland and “would be more susceptible to detection and interdiction than is now

the situation where Gulf havens afford cover, concealment, and support.” In keeping with this

strategy, U.S. Army and Marines planned to seize the Iranian offshore oil platforms and the larger

islands, Abu Musa and Farsi Island in particular, during Operation Earnest Will.

If such a plan failed to deter Iran, CENTCOM planned to escalate and strike Iranian air and naval

targets on the mainland. First on the target list were the Silkworm missile storage sites and Iranian

intelligence sites. Other strike packages included Bandar Abbas (to destroy IRIN and IRGC forces).

Fourteen B-52s with a mixed load, including precision-guided cruise missiles, would knock out the

hard-to-reach targets, such as the Bandar Abbas air defense headquarters and the First Naval

District Headquarters building, while others would attack the Bandar Abbas Naval Base.

Simultaneously, U.S. Navy aircraft and F-16s based in Bahrain or Saudi Arabia would strike the air

(continued...)

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

As far as mine-clearing operations, during the 1980s tanker war in the Gulf, a total of 17

minesweepers (six from the U.S. Navy, nine from European navies, and two from the Soviet

Navy)24 were used to clear mines from the Gulf. Given the limited mine-clearing assets that the

United States has stationed at Bahrain (four mine countermeasures ships and one squadron of

mine-clearing helicopters25), the additional minesweepers provided by coalition partners could be

of particular value in mitigating the need for the United States to transport additional mineclearing ships and helicopters into the area.

U.S. and coalition forces could counter Iranian speed boats and surface craft operating at sea

using ship-based guns and missiles as well as land- and sea-based airplanes and helicopters armed

with missiles, rockets, guided bombs, and guns. U.S. and coalition naval forces could use aircraft

to attack Iranian speed boats and other surface craft that are tied up at pier, but Iran could make

this more difficult by dispersing its speed boats and other surface craft along Iran’s lengthy

Persian Gulf shoreline. U.S. and coalition military leaders might choose to initially keep their

warships out of confined waters until the threat posed by speed boats has been suppressed by

attacks from aircraft; doing so could reduce the risk to U.S. or coalition warships but lengthen

timelines for reopening the Gulf.

Some of Iran’s shore-based anti-ship cruise missiles (ASCMs) are fired from launchers that are

mobile and camouflaged, making them more difficult to locate and destroy. Even so, a January 5,

2012, press report quoted a “U.S. naval officer with considerable experience in the region” as

stating “Anti-ship cruise missiles are mobile, yet can ... be found and destroyed.”26 Many of the

radars that provide targeting for these missiles reportedly are in fixed locations, making them

easier to attack.27

With regard to combating Iran’s submarine capabilities, detecting a well-maintained, proficiently

operated Kilo-class submarine that is submerged and waiting quietly near a choke point like the

Strait of Hormuz can be a challenge for a navy, even the U.S. Navy, that has capable

antisubmarine forces. On the other hand, the threat posed by Kilo-class submarines can be

reduced by tracking their movements in the days and weeks prior to the start of a confrontation.

Diesel-electric submarines like the Kilo design have a submerged endurance of no more than a

few days, and are vulnerable to attack when they surface to snorkel. They are also vulnerable in

port.

Iran’s mini-submarines are more likely to be used inside the Gulf. Their small size could make

them particularly difficult to detect, but they also have limited at-sea endurance and can carry

(...continued)

defense headquarters and destroy Iranian surface-to-air Hawk missiles that ring Bandar Abbas

airport, which, in addition to being a commercial airport, was the main southern airfield for IRIAF

and its complement of F-4 fighters.

(David B. Crist, Gulf of Conflict: A History of U.S.-Iranian Confrontation at Sea, Washington

Institute for Near East Policy, June 2009 (Policy Focus #95), p. 32.

David B. Crist, Gulf of Conflict: A History of U.S.-Iranian Confrontation at Sea, Washington Institute for Near East

Policy, June 2009 (Policy Focus #95), p. 31.

Jonathan Schroden, A Strait Comparison: Lessons Learned from the 1915 Dardanelles Campaign in the Context of a

Strait of Hormuz Closure Event, CNA (Center for Naval Analyses), September 2011, p. 43.

Peter Apps, “Iran Could Close Hormuz—But Not For Long,” Reuters.com, January 5, 2012. The ellipsis in the quote

as in the article.

Lee Keath, “Closing Strait A High Cost For Iran,” ArmyTimes.com, December 29, 2011.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

limited ordnance payloads. The naval officer cited above reportedly also said of Iran’s forces that

“Submarines are short-duration threats—they eventually have to come to port for resupply and

when they do they will be sitting ducks.”28

Oil Market Considerations

The Strait of Hormuz is a key artery of the global oil market. Persian Gulf oil exporters—Iraq,

Kuwait, Saudi Arabia, the United Arab Emirates and Qatar—shipped about 17 million barrels a

day (Mb/d) of oil through the Strait in 2011, which is roughly 20% of the global oil market and

35% of seaborne trade according to the Energy Information Administration.29 On average, 14

crude oil tankers leave the Persian Gulf through the Strait each day with more than 85% of these

crude oil exports going to Asian countries, including China, Japan, India, and South Korea.30 The

United States imports 1.8 Mb/d from Persian Gulf countries, roughly 10% of U.S. consumption.31

Separately, more than a quarter of the world’s liquefied natural gas (LNG) trade, equal to about

2.6% of global natural gas consumption, moves through the Strait.32 This is primarily exports

from Qatar to Europe and Asia. The United States imports little LNG.

The Persian Gulf is also home to the world’s spare oil production capacity. Current estimates for

global spare oil production capacity tend to be around 2 to 3 Mb/d. OPEC members hold spare

capacity as a result of their market management strategy.33 Basically all of this spare capacity is

held by Persian Gulf oil producers—mostly Saudi Arabia, with small amounts in Kuwait and the

United Arab Emirates. Spare capacity is viewed as a cushion to the oil market which can be used

to offset supply disruptions. However, given its location, this spare capacity would not be

available to offset a disruption to the Strait of Hormuz.

There is little ability for oil shipments to bypass the Strait through alternative routes, particularly

in the short-run. According to reports, Saudi Arabia could redirect 1.5 Mb/d of oil currently

exported through the Persian Gulf to terminals on its Red Sea coast through unutilized capacity

currently available on its East-West pipeline.34 A 1.5 Mb/d pipeline to bypass the Strait is being

built in the United Arab Emirates, but it is not likely to be completed until the middle of 2012.35

Several other pipelines that ran through Iraq and Saudi Arabia to the Mediterranean and Red Sea

export facilities have been out of operation for many years, and it is unclear how readily they

could be returned to operation.

Peter Apps, “Iran Could Close Hormuz—But Not For Long,” Reuters.com, January 5, 2012.

Energy Information Administration, U.S. Department of Energy, The Strait of Hormuz is the world’s most important

oil transit chokepoint, Today in Energy, January 4, 2012, http://www.eia.gov/todayinenergy/detail.cfm?id=4430#.

Ibid.

Average imports, January to October 2011. Much of U.S. import from the region likely come through the Strait. For

more background on U.S. imports, see CRS Report R41765, U.S. Oil Imports: Context and Considerations, by (name re

dacted).

Based on data from the BP Statistical Review of World Energy, http://www.bp.com/statisticalreview.

For an explanation, see CRS Report R42024, Oil Price Fluctuations, by (name redacted) and (name redacted).

Robert McNally, Managing Oil Market Disruption in a Confrontation with Iran, Council on Foreign Relations,

January 2012.

Humeyra Pamuk and Dmitry Zhdannikov, “UAE Delays Oil Pipeline to Bypass Hormuz,” Reuters, January 9, 2012.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

A disruption of oil through the Strait of Hormuz could significantly affect global oil prices.

Though most of the flows through the Strait go to Asia, the oil market is globally integrated and a

disruption anywhere can contribute to higher oil prices everywhere. A disruption of oil exported

from the Persian Gulf to Asia would leave Asian refineries bidding for oil from alternative

sources elsewhere. Due to the wide number of relevant variables, there is significant uncertainty

on how much a disruption could contribute to higher crude oil prices. While disruption risks in

the past may have contributed to prices being higher than they might have otherwise been, actual

Iran-related events have not necessarily resulted in clear and significant price increases ex-post

(see Table 1). The numerous variables affecting the price of oil at any given time can make it

difficult to estimate what specific change in price is due to a specific event. Nonetheless,

reductions or threatened reductions to supply do tend to push oil prices up.

Key uncertainties for the impact of a disruption would be how much global oil supply was

reduced, risks of further reductions, and duration of the disruption. Risk of damage to oil

production and export facilities in the Persian Gulf would also be of concern. The response of oilimporting countries would also be important, namely if and how consumer countries released

strategic oil stockpiles, in addition to any possible military response. Conditions in the rest of the

oil market and the global economy would also affect how prices eventually responded. For

example, disruptions that occur during periods of strong global oil demand growth and limited

supply growth elsewhere may have a relatively greater price impacts than those that occur when

demand is falling and other sources of supply are growing or commercial oil inventories are high.

Given limited bypass options, outright closure of the Strait would represent an unprecedented

disruption to global oil supply and would likely cause a substantial increase in oil prices.

However, as suggested above, outright closure may be unlikely, and even if it occurred, might not

persist for very long. Another possibility is the harassment of tanker traffic through the Strait as

described above. The impact of harassment would depend on the degree to which it effectively

reduced oil exports through the Strait and its duration. Harassment could reduce the rate at which

oil exited the Gulf, raise the cost of transport, and raise worries of future disruption. A third

possibility—one already pursued by Iran—is that Iranian officials can make threatening

statements suggesting they will disrupt tanker traffic. The increased perception of risk could

contribute to higher oil prices without requiring military action, though this is only effective in

contributing to oil prices as long as and to the degree that global oil market participants take such

threats seriously. Such a measure can benefit Iran by increasing their oil revenues without risking

military retaliation.

In the event of a disruption, consumer countries could release strategic stocks to offset the impact

on oil supply. The United States currently holds 696 million barrels of crude oil in the Strategic

Petroleum Reserve (SPR),36 a publicly held stockpile of crude oil to be used to offset supply

disruptions.37 The United States coordinates use of its SPR with other members of the

International Energy Agency (IEA), which include Japan, Germany, South Korea, and other

members of the Organization for Economic Cooperation and Development (OECD). Oil

importing members of the IEA have an obligation to hold oil stocks equal to at least 90 days

worth of net imports. The IEA has coordinated to collectively release stocks three times since the

Energy Information Administration, Stocks by Type, December 29, 2011, http://www.eia.gov/dnav/pet/

pet_stoc_typ_d_nus_SAS_mbbl_m.htm.

For more background the SPR, see CRS Report R41687, The Strategic Petroleum Reserve and Refined Product

Reserves: Authorization and Drawdown Policy, by (name redacted) and (name redacted)

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

organization was created in the wake of the 1973/1974 oil crisis: after Iraq’s invasion of Kuwait

in 1990/1991; after Hurricanes Katrina and Rita in 2005; and in response to prolonged disruption

of Libyan oil production in 2011. IEA countries hold about 4.2 billion barrels of crude oil and

refined products in inventory, of which 1.5 billion are held by governments.38 If drawn down at

the maximum rate technically possible, these government-held stocks could be delivered to the

market at an average rate of 10.4 Mb/d of crude oil and 4 Mb/d of products in the first month of

an IEA collective action, diminishing thereafter.39 (The rate diminishes as stocks are depleted.) By

offsetting the loss of supply, a strategic stock release could blunt the impact a disruption can have

on oil prices.

There are several additional resources to respond to an oil supply emergency. In some IEA

member countries oil companies are required by governments to hold emergency stocks. These

can be made available to supplement a release government held strategic stocks elsewhere. IEA

members can also coordinate demand restraint measures to offset the impact of a supply

disruption.40 Some non-OECD governments, including China, have started building strategic

stocks and some oil exporters, including Saudi Arabia, hold small amounts of crude in storage

near consumer markets.41

Conclusion

Concerns about broadening international sanctions on Iran’s oil exports prompted some Iranian

officials to make threatening statements about closing the Strait of Hormuz. Iran has invested in

the military capability to close or disrupt traffic through the Strait. If Iran attempted to do so, the

United States—which has invested in military preparedness to keep the Strait open—would

respond, potentially joined by other countries. Such a military response may or may not be

limited to simply reopening the Strait for transit.

The threat of military response, coupled with its economic concern about disrupting commerce

with its own trading partners, makes Iran unlikely to attempt to close the Strait of Hormuz. Iran

has the option of harassing tanker traffic through the Gulf as it has in the past, though that also

runs the risk of military retaliation and alienating customers. However, it is possible that Iranian

action becomes relatively more likely as more countries reduce or refuse Iranian exports.

Alternatively, Iran may choose to continue making threatening statements without actually acting

and/or to seek a diplomatic solution to curb oil sanctions through renewing international talks on

its nuclear program. A disruption of oil exports through the Strait would have significant impacts

on oil prices around the world. To some degree a disruption could be offset by release from the

U.S. Strategic Petroleum Reserve and similar reserves in other countries. Even without an extant

International Energy Agency, Oil Market Report, December 13, 2011, p. 68, http://omrpublic.iea.org/currentissues/

full.pdf. The remaining inventories are held by companies either for purely commercial reasons or as required by their

governments to maintain enough stocks to meet their IEA commitment.

International Energy Agency, Fact Sheet: IEA Stocks and Drawdown Capacity, February 25, 2011,

http://www.iea.org/files/Potential_IEA_Stockdraw_Capacity.pdf.

International Energy Agency, IEA Response System for Oil Supply Emergencies, 2011, 2011, p. 10,

http://www.iea.org/publications/free_new_Desc.asp?PUBS_ID=1912.

Aramco and the Abu Dhabi National Oil Company have storage facilities for commercial and emergency use in

Japan, leased for free in return for prioritizing emergency supplies to Japan if they become necessary. Aramco also has

some storage in the Netherlands. Aramco had leased 5 million barrels of storage capacity in St. Eustacia in the

Caribbean but relinquished it in 2009.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

disruption, concerns about a future disruption may also contribute to oil prices being higher than

they might otherwise be by creating uncertainty about a large portion of the world’s oil supply.

Iran has the option of making threatening statements about the Strait without actually acting,

which is what it has been doing since December 2011. So long as oil market participants consider

this a credible future threat, it could contribute to upward pressure on oil prices.

Even prior to Iran’s recent threats, legislation in Congress to increase sanctions on Iran was

pending, and some had been recently adopted, such as sanctions against banks that do business

with Iran’s Central Bank. Some legislation still pending might receive more attention in light of

Iran’s threats to the Strait. If hostilities with Iran were to occur in the Strait, it is likely that the

question of presidential authority to use force will be raised.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

Table 1. Selected Iran-Related Events and Oil Price Changes

Price Changes

Prior

Month

Start of

Iran/Iraq War,

9/23/1980a

0.1%

0.5%

The monthly oil price did not change much prior to this conflict beginning and

even a month into it. However, six months into the conflict oil prices were

up 11%.

“Tanker War”

begins,

3/27/1984

-0.2%

-0.9%

The “tanker war” included 44 attacks against tankers from other nations over

the course of nine months. During this time, prices remained close to the

March 27 price or lower, dropping 14% by the end of the period. The large

drop is more reflective of the global oil market than the uncertainty created

by the tanker war. Supply levels remained high during the time period, while

demand was growing slowly.b

Re-flagged

Bridgeton hits

a mine

(Operation

Earnest Will),

7/24/1987

0.4%

-9.6%

The Bridgeton, carrying the U.S. flag, hit a mine in the Persian Gulf. Under U.S.

Operation Earnest Will, ships of Kuwaiti tankers were re-flagged with the U.S.

flag so that the U.S. Navy could protect them in the Persian Gulf. Prices stayed

above the July 24th price for almost three weeks before steadily declining. As

minimal oil was interrupted overall, the risk to supply was decreased

consequently putting downward pressure on prices.c

Operation

Praying

Mantis,

4/18/1988

11.7%

-5.9%

The operation destroyed almost 40% of Iran’s navy. Prices after the event

dropped immediately with the biggest daily drop almost 5% two weeks later.

Praying Mantis greatly diminished Iran’s capabilities in the Persian Gulf,

decreasing the likelihood of an oil cutoff. Leading up to U.S. Operation Praying

Mantis, the overall oil market faced lower demand because of warm weather

in Europe, and higher production as Saudi Arabia was producing at its OPEC

quota and no longer below it and non-OPEC production was higher than it

had been.d

Iran arms

Strait of

Hormuz,

3/28/1995

3.0%

The Pentagon announced that it was monitoring Iranian installation of missiles

in the Strait of Hormuz. Iran also took possession and fortified two nearby

islands claimed by them and the United Arab Emirates. During the month after

the announcement daily prices fluctuated up and down before jumping at the

end of the period. However, about a week after the event began prices

declined eight consecutive days.

Iran threatens

the Strait,

12/28/2011

1.2%

-0.4%

Iran’s first Vice President Mohammad Reza Rahimi was the first to threaten

closure of the Strait. Prices initially rose almost daily from this event, peaking

on January 4, almost 4% higher before declining.

Event

Commentary

Source: U.S. Energy Information Administration, Annual Oil Market Chronology, http://www.eia.gov/emeu/cabs/

AOMC/8089.html.

Notes: Crude prices are NYMEX West Texas Intermediate crude prices (daily) except 1980, which is refiners

acquisition cost of crude reported by EIA (monthly).

Although there were events leading up to September 23, 1980 that contributed to hostilities, this date is

used as a start date to the military conflict.

U.S. Energy Information Administration (EIA), Short-Term Energy Outlook, DOE/EIA-0202(84/3Q),

Washington, DC, August 1984, p. 12, http://www.eia.gov/forecasts/steo/archives/3Q84.pdf.

EIA, Short-Term Energy Outlook, DOE/EIA-0202(87/4Q), Washington, DC, October 1987, p. 9,

http://www.eia.gov/forecasts/steo/archives/4Q87.pdf.

EIA, Short-Term Energy Outlook, DOE/EIA-0202(88/2Q), Washington, DC, April 1988, p. 7,

http://www.eia.gov/forecasts/steo/archives/2Q88.pdf.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

Appendix. Legal Framework Applicable to

International Straits

A “global diplomatic effort to regulate and write rules for all ocean areas, all uses of the seas and

all of its resources” led the United Nations to convene the Third United Nations Conference on

the Sea in 197342 and adoption of the United Nations Convention on the Law of the Sea

(UNCLOS) in 1982.43 The Convention states:

Recognizing the desirability of establishing through this Convention, with due regard for the

sovereignty of all States, a legal order for the seas and oceans which will facilitate

international communication, and will promote the peaceful uses of the seas and oceans …

Believing that the codification and progressive development of the law of the sea achieved in

this Convention will contribute to the strengthening of peace, security, cooperation and

friendly relations among all nations in conformity with the principles of justice and equal

rights … [and] Affirming that matters not regulated by this Convention continue to be

governed by the rules and principles of general international law…

Parties to the Convention agreed to the adoption of the comprehensive international treaty after

nine years of negotiations. UNCLOS generally incorporates the rules of international law codified

in the1958 United Nations Convention on the High Seas,44 but also comprehensively addresses

the use of other areas of the sea including, for example, the territorial seas, natural resources, and

the seabed. While the United States is a signatory to the 1958 Convention on the High Seas, it is

not a party to UNCLOS. However, UNCLOS is generally viewed as a codification of customary

international law.45 With respect to the coastal nations bordering the Straits of Hormuz, Iran is a

signatory to UNCLOS46 but has not ratified the Convention and Oman is both a signatory to and

has ratified the Convention.47

The United Nations Convention on the Law of the Sea (A historical perspective), available at http://www.un.org/

Depts/los/convention_agreements/convention_historical_perspective.htm.

United Nations Convention on the Law of the Seas (UNCLOS), 21 I.L.M. 1261. Convention adopted December 10,

1982. Entered into force November 16, 1994 (the United States is not a party to the Agreement).

Convention on the High Seas, 13 U.S.T. 2312; T.I.A.S. 5200; 450 U.N.T.S. 82. Signed at Geneva, April 29, 1958.

Entered into force September 30, 1962.

See Presidential Proclamation 5030, President Ronald Reagan, March 10, 1983 available at http://www.state.gov/

documents/organization/58381.pdf. For a discussion on policy issues related to ratification of UNCLOS, see CRS

Report RS21890, The U.N. Law of the Sea Convention and the United States: Developments Since October 2003, by

(name redacted).

The Islamic Republic of Iran signed the Convention on 10 December 1982, with the following declaration, in part:

In accordance with article 310 of the Convention on the Law of the Sea, the Government of the

Islamic Republic of Iran seizes the opportunity at this solemn moment of signing the Convention,

to place on the records its “understanding” in relation to certain provisions of the Convention. The

main objective for submitting these declarations is the avoidance of eventual future interpretation

of the following articles in a manner incompatible with the original intention and previous positions

or in disharmony with national laws and regulations of the Islamic Republic of Iran. It is ... the

understanding of the Islamic Republic of Iran that:

1) Notwithstanding the intended character of the Convention being one of general application and

of law making nature, certain of its provisions are merely product of quid pro quo which do not

necessarily purport to codify the existing customs or established usage (practice) regarded as

having an obligatory character. Therefore, it seems natural and in harmony with article 34 of the

1969 Vienna Convention on the Law of Treaties, that only states parties to the Law of the Sea

(continued...)

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

Straits used for international navigation are addressed in UNCLOS. Specifically, Part III (Arts.

34-45) of the Convention is comprised of various provisions related to the legal status of waters

forming straits and authorized forms of passage through such waters. The general provisions

(Arts. 34-36) establish the legal status of waters forming straits and scope of application.48 The

remaining Articles in Part III identify the legal regimes of transit passage and innocent passage,

including the rights and duties of transiting vessels as well as the rights and duties of States

bordering the straits.

Transit passage is defined as “the exercise in accordance with this Part of the freedom of

navigation and overflight solely for the purpose of continuous and expeditious transit of the strait

between one part of the high seas or an exclusive economic zone and another part of the high seas

or an exclusive economic zone.”49 While exercising the right of transit passage, ships and aircraft

are required to: (a) proceed without delay through or over the strait; (b) refrain from any threat or

use of force against the sovereignty, territorial integrity or political independence of the States

bordering the strait; and (c) refrain from any activities other than those incident to their normal

modes of continuous and expeditious transit unless necessary by force majeure or by distress.50

The States bordering the straits may adopt laws and regulations related to safety and navigation of

maritime traffic, pollution, fishing, and commodity trades.51 However, authorized laws and

regulations “shall not discriminate in form or in fact among foreign ships or in their application

have the practical effect of denying, hampering or impairing the right of transit passage.”52

In support of the safety and navigation of maritime traffic, States bordering straits may “designate

sea lanes and prescribe traffic separation schemes … to promote the safe passage of ships.”53

With respect to the Straits of Hormuz, the States bordering the straits have designated sea lanes

and a traffic separation scheme as adopted by the Maritime Safety Committee of the InterGovernmental Maritime Consultative Organization (a specialized agency of the United Nations,

(...continued)

Convention shall be entitled to benefit from the contractual rights created therein.

The above considerations pertain specifically (but not exclusively) to the following:

—The right of Transit passage through straits used for international navigation (Part III,

Section 2, article 38).

—The notion of “Exclusive Economic Zone” (Part V). - All matters regarding the

International Seabed Area and the Concept of “Common Heritage of mankind” (Part XI).”

Available at http://www.un.org/depts/los/convention_agreements/

convention_declarations.htm.

Oman signed the Convention on July 1, 1983 with the following declaration: “It is the understanding of the

Government of the Sultanate of Oman that the application of the provisions of articles 19, 25, 34, 38 and 45 of the

Convention does not preclude a coastal State from taking such appropriate measures as are necessary to protect its

interest of peace and security.” Oman ratified the Convention on August 17, 1989 with an additional seven

declarations. Available at http://www.un.org/depts/los/convention_agreements/convention_declarations.htm.

UNCLOS, Article 34 – Legal status of waters forming straits used for international navigation; UNCLOS, Article 35

– Scope of this Part; and UNCLOS Article 36 – High seas routes or routes through exclusive economic zones through

straits used for international navigation.

Ibid. at Art. 38, Para. 2.

Ibid. at Art. 39, Para. 1. See also Department of the Navy, Office of the Chief of Naval Operations and Headquarters,

U.S. Marine Corps, Department of Homeland Security and U.S. Coast Guard, The Commander’s Handbook on the Law

of Naval Operations, NWP 1-14M, MCWP 5-12.1, COMDTPUB P5800.7A, Para. 2.5.3.1, July 2007.

UNCLOS, Art. 42, Para. 1.

Ibid. at Art. 43, Para. 2.

Ibid. at Art. 41, Para. 1.

Congressional Research Service

Iran’s Threat to the Strait of Hormuz

now known as the International Maritime Organization (IMO)) in 1979.54 States bordering straits

may substitute other sea lanes or traffic separation schemes, after consultation with a competent

international organization (IMO).55 Ships in transit passage are required to respect the applicable

sea lanes and traffic separation schemes established in accordance with UNCLOS.56 Finally,

States bordering straits “shall not hamper transit passage and shall give appropriate publicity to

any danger to navigation or overflight within or over the strait of which they have knowledge.

There shall be no suspension of transit passage.”57

Author Contact Information

(name redacted), Coordinator

Specialist in Middle Eastern Affairs

[redacted]@crs.loc.gov, 7-....

(name redacted)

Legislative Attorney

[redacted]@crs.loc.gov, 7-....

(name redacted)

Specialist in Energy Policy

[redacted]@crs.loc.gov, 7-....

(name redacted)

Specialist in Energy Policy

[redacted]@crs.loc.gov, 7-....

(name redacted)

Specialist in Naval Affairs

[redacted]@crs.loc.gov, 7-....

See U.S. Department of Homeland Security, United States Coast Guard, Navigation Center available at

http://navcen.uscg.gov/pdf/imo/COLREGSCirculars/COLREG2-Circ11.pdf.

UNCLOS, Art. 41, Paras. 2 & 4.

Id. at Art. 41, Para. 7.

Id. at Art. 44.

Congressional Research Service

EveryCRSReport.com

The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the

Library of Congress, charged with providing the United States Congress non-partisan advice on

issues that may come before Congress.

EveryCRSReport.com republishes CRS reports that are available to all Congressional staff. The

reports are not classified, and Members of Congress routinely make individual reports available to

the public.

Prior to our republication, we redacted names, phone numbers and email addresses of analysts

who produced the reports. We also added this page to the report. We have not intentionally made

any other changes to any report published on EveryCRSReport.com.

CRS reports, as a work of the United States government, are not subject to copyright protection in

the United States. Any CRS report may be reproduced and distributed in its entirety without

permission from CRS. However, as a CRS report may include copyrighted images or material from a

third party, you may need to obtain permission of the copyright holder if you wish to copy or

otherwise use copyrighted material.

Information in a CRS report should not be relied upon for purposes other than public

understanding of information that has been provided by CRS to members of Congress in

connection with CRS' institutional role.

EveryCRSReport.com is not a government website and is not affiliated with CRS. We do not claim

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.