PortandTerminal.com, April 23, 2019
President Donald Trump’s administration announced Monday that buyers of Iranian oil must stop purchases by May 1 or face sanctions. The announcement decision drew an immediate angry threat from Iran to close the Strait of Hormuz, the world’s busiest oil transit choke point.
US Secretary of State Mike Pompeo said Monday that countries continuing to buy crude oil from Iran beyond the May deadline would have to face the consequences.
We’ve made clear if you don’t abide by this there will be sanctionsMike Pompeo, United States Secretary of State
Tensions have been on the rise between Tehran and Washington since last year when the President withdrew from a 2015 nuclear deal between Iran and six major powers and reimposed sanctions on the country.
In recent years, there have been periodic confrontations between the IRGC (Islamic Revolutionary Guard Corps) and U.S. military in the Gulf.
The Strait of Hormuz, at the mouth of the Persian Gulf, is viewed as the most important oil chokepoint in the world, with Saudi Arabia, Iraq, Iran, Kuwait and the UAE all dependent on it move to crude and refined products on to the world market, primarily to Asian buyers.
Reaction from Iran
Iran is cornered economically and is fighting back with angry threats of their own in reaction to the American announcement made on Monday.
Iran’s parliament passed a bill on Tuesday requiring the government to take firm steps to respond to “terrorist actions” by U.S. forces, state TV reported.
The new chief commander of the IRGC Hossein Salami has warned in the past that Iran could use its cruise and ballistic missiles and drones, mines, speedboats, and missile launchers in the Gulf area to confront the United States.
Highly loyal to Iran’s Supreme Leader Ayatollah Ali Khamenei, the IRGC is a powerful force which controls much of the Iranian economy and wields political influence in the country’s faction-ridden clerical establishment.
What comes next?
Iran has frequently claimed it would be prepared to close the Strait of Hormuz in recent years prompting many to dismiss their latest threat as nothing more than rhetoric.
Iran’s Ministry of Foreign Affairs is not saying much to calm the situation at this point, publishing an angry treat directed at American Secretary of State Mike Pompeo and President Trump.
Iran is cornered. Economically it desperately needs the revenue it receives from its oil exports. A third of the country’s population has fallen below the official poverty line.
Iran’s economy only has gotten worse since President Donald Trump withdrew America from the nuclear deal, with the rial’s unofficial rate plummeting from 62,000 to one US dollar to as low as 150,000 rial to the dollar.
Growing numbers of protests by frustrated Iranian citizens and the attack by Arab separatists on a military parade in the country’s southwest which killed 25 people are evidence that the country’s population is growing desperate.
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