How Iran could plunge the world into a 1970s-style inflationary recession
Increasing threats of Israeli strikes against Iran's nuclear buildup have gotten much attention in the media.
But much less attention has been given to Iranian capabilities to retaliate by sparking global inflation and recession. With an estimated stockpile of 2,000 ultrasensitive floating mines, Iran could close the Strait of Hormuz, a 22-mile-wide ship channel, 35-90 meters deep, through which 20 percent of the world's oil must pass to get out of the Persian Gulf.
Here are some scary statistics:
From http://www.thecuttingedgenews.com/index.php?article=888&pageid=&pagename=
"The Cutting Edge. Monday February 06 2012--reaching 1.4 million monthly
America With No Plan for an Oil Interruption
Iran Defiantly Increases Threat to Strait of Hormuz with New Naval Base
Martin Barillas, Cutting Edge Senior Contributor
"Iran opened a new naval base on October 27, 2008, at the southern mouth of the Strait of Hormuz, the strategic chokepoint for Persian Gulf oil. About 20 percent of the world's petroleum and 40 percent of the searborne crude traverse the Strait daily. As such, some 20 percent of America's daily oil needs, passes through the Strait, according to the Energy Information Administration. The EIA has dubbed it, 'by far the world's most important chokepoint. ...
If the Strait should be closed, and the access to the world's markets for Saudi Arabia's oil terminals be hindered due to an attack, some six to nine million barrels per day will be taken off the global market, leading to an overnight oil price-hike to more than $200/bbl. ...
(G)iven Iran's missile batteries along its shores, At best, it could take weeks or months for the Navy to clear the strait of mines and restore confidence to shippers and the oil market. In today's environment, however, the Navy would face Iranian cruise-missiles enhanced by North Korean technology launched from land-based and ship-based batteries. Thus the potential of further military escalation is obvious. The US has not faced such a cruise missile threat in the past. Argentina used a French-made Exocet short-range cruise missile in 1982 during the Falklands-Malvinas War that severely damaged the HMS Glamorgan destroyer. The cruise-missiles in Iran's stockpile have a longer range. An October 28 test by North Korea, a supplier of technology to Iran, showed that it now has the capability of launching a sub-sonic cruise missile with a 100 mile effective range. ...
In order to protect its fleet, the US would be faced with the prospect of seeking and destroying the several hundred Iranian mobile land-based, anti-ship cruise missiles, mushrooming into a sustained naval and air warfare. But experts believe Iran would not have to entirely shut down the Strait in order to cause an escalation of hostilities in the region and a resultant spike in oil prices. By laying just a few mines from its stockpiles, Iran could create a 'virtual closure,' convincing petroleum shipping companies and their insurers that the risk of passage outweighs the benefits.
The mines that Iran is thought to have are the Russian-made MDM-6, ... ten times more powerful than those used in the 1980s. These detonate in response to acoustic, magnetic, or pressure phenomena within a range of 60 yards. These could halt or severely limit ship traffic through the Strait and the Persian Gulf. Iran is believed to have at least 2,000 such mines that can be delivered from its three frigates, two corvettes, three submarines and 10 fast missile boats. Iran maintains three ships in the Persian Gulf that appear to have dedicated mine-laying capabilities, plus three mine-laying helicopters. For a sense of scale, in 1972 the US Navy was able to totally shut down North Vietnam's Haiphong Harbor with just 36 much less sophisticated mines."
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