If 2011 was the year of the Arab Spring and wider MENA unrest then perhaps, following the past few weeks of increased rhetoric between Washington and Tehran, the war drums are now sounding for the Middle East in 2012. If some assessments are to be believed, conflict is inevitable following Iran testing missiles, exercising its navy, and issuing a sharp warning cautioning the US against moving an aircraft carrier into the Persian Gulf. Despite this rebuke, the US has made clear operations will continue in the international waterway, dispatching a second US aircraft carrier, the USS Carl Vinson, into the Gulf days later. Iran then threatened to close the Strait of Hormuz, through which 20% of the world’s oil flows. It seems that this, coupled with an admission from Tehran that it plans to start uranium enrichment in the “near future” at the Fordow underground site, which is located in a highly-protected bunker beneath a mountain close to the Iranian holy city of Qom, could prove to be the final straw for many in the West. Yet does it signify that a military conflict is inevitable?
A fresh round of Iranian military exercises around the strategic waterway are due to take place between 21 January to 19 February 2012 and are being seen as an attempt to show that Tehran has control over its own sphere of influence in territorial matters and over domestic policy such as its perceived challenge to its sovereignty over its nuclear destiny. If Iran gets closer to producing a nuclear weapon it could trigger military moves by the US or Israel, but equally the site would be difficult, if not impossible, to attack from the air. Does the resultant rhetoric come from the perception then that uranium enrichment at this site is an indication that Iran has reached a point of no return in its nuclear programme and that this will prompt a military campaign against it? It is possible, but more likely that the moves come amidst the US and EU recently imposing stricter sanctions on any international entities dealing with the Central Bank of Iran in an attempt to strangle Iranian oil exports. Throw into the mix Iran’s judiciary sentencing of an Iranian-American to death for allegedly spying for the CIA and his case is likely to provide leverage in Iran’s negotiations with the West.
It seems likely then that as Iran’s economy, which is reliant on oil exports, feels the sting of Western sanctions, that they are responding with increasingly heated language as they feel pressured. Military action may be the result but Iran is more likely just pushing back against the pressure these sanctions bring as attempting a military move against the US or the vital waterway would damage their own interests in the long run as it would trigger a devastating US military reaction and leave Tehran utterly isolated on the world stage. Such a move would also end up further crippling the beleaguered Iranian economy as it would shatter its projected US$100-billion oil export revenue for 2012. Such realities however do not change the fact that there is a benefit to be derived from suggesting that such action may be taken: Iranian rhetoric has a practical impact in that it pushes up oil prices and provides Iran with a small infusion of cash. However this must be placed in context of how far Tehran is willing to risk on the issue.
Admittedly Iran has invested heavily in its navy, and especially in unconventional tactics that could disrupt shipping through the Strait, so the threat of naval disruption shouldn’t be dismissed outright. Also in such a situation there is always the chance that there will be a miscalculation or engagement of some sorts which would set off a larger confrontation, however in the long-term it is assessed that now is not the right time for such a military encounter by either side and that cooler more strategic thinking will prevail. Ultimately Iran-US tensions are likely to continue to rise and fall until either Iran builds a nuclear weapon, the West strikes or the West finds a way to convince Iran to halt its controversial nuclear programme. In the meantime the idea that an outright conflict is inevitable should be considered as mere speculation which aides efforts to boost commodity prices: oil is already nearing US$113 for a barrel of crude bucking any concept of an impending global recession.
The Inkerman Group continues to monitor events and provide pre-emptive advice through our intelligence led approach to threat mitigation on this and other geo-political issues globally set to shape the near future and potentially impact business considerably.
For more information on this subject and to talk to one of our Corporate Intelligence team on regional matters affecting business please contact Alice.boyes@inkerman.com or call 01233 644940
