Olivier Guitta is the Managing Director of GlobalStrat, a geopolitical risk consulting firm.
The recent escalation in the U.S./Israel war against Iran has put the energy issue in the forefront of the conflict. Iran has from the start struck energy targets while the U.S. and Israel have avoided to do so, but yesterday the U.S. hit Iran’s largest gas field of South Pars that it shares with Qatar. Since then, Iran has multiplied the targeting of Gulf energy infrastructure with the logical consequence of the price of oil and gas sharply rising. This increase of energy prices might be just the beginning since the situation in the Strait of Hormuz has the potential of a dramatic worsening.
It is quite telling that the U.S. has offered from the beginning as a solution to the thorny Hormuz matter to protect the ships that would like to cross the Strait. While this would be a very complicated to achieve if at all, no military option has been suggested. Wouldn’t it be easier to focus on targeting the Islamic Revolutionary Guard Corps (IRGC) bases directly on the strait along with a campaign to sink all Iranian warships? Precision strikes on Revolutionary Guard bases near the Strait could degrade Iran’s capability. The fact that it has not been implemented means in a way that Iran has the upper hand in Hormuz. This is far from reassuring not only for the success of a western military victory in the Strait but also for the world’s economy and global investors.
The announcement of six western countries committing to secure the strait is nonetheless not a full-proof solution. One should not underestimate the extremism of the regime even at a lower level that could decide to go all in and use sea mines. In fact, the IRGC has transformed the narrow waterway into a latent minefield. With an estimated 5,000 to 6,000 naval mines at its disposal and facilities positioned along both approaches to the Strait, the IRGC possesses the capability to seal off this vital artery within hours. What makes this threat particularly insidious is not Iran’s ability to deploy the mines, but the U.S.’ limited capacity to remove them.
The Pentagon’s minesweeping fleet is insufficient for the scale of threat it would face. Clearing thousands of mines from contested waters could require months or up to a year of painstaking work; time during which global oil markets would convulse, insurance premiums would soar even more prohibitively, and tanker traffic would grind to a halt.
The economic implications are staggering. Even a brief closure of the Strait would hammer global energy markets, likely triggering price spikes that make previous oil crises look mild, with the barrel possibly reaching anywhere between 150$ and 200$. Asian economies, hooked on Gulf crude, would be hit first. From there, the chaos would bleed into global manufacturing and shipping, likely plunging the world into a dramatic recession.
Iran doesn’t need to win a naval battle. By dumping cheap mines in the Strait, Tehran can freeze not only 20 per cent of the world’s oil but also 5 per cent of global trade. It’s the ultimate asymmetric play: dirt cheap, total gridlock. One wrong move could devastate the global economy for years after the shooting ends. All the air and sea power in the world won’t matter once the slow, grinding math of mine warfare takes over.
Ignoring Iran’s past warnings of retaliation against Israel and the Gulf countries, including energy targets was a grave mistake. Not envisioning a possible Iranian sea mining operation of the Strait of Hormuz could be even more dramatic.
Olivier Guitta is the Managing Director of GlobalStrat, a geopolitical risk consulting firm.
The recent escalation in the U.S./Israel war against Iran has put the energy issue in the forefront of the conflict. Iran has from the start struck energy targets while the U.S. and Israel have avoided to do so, but yesterday the U.S. hit Iran’s largest gas field of South Pars that it shares with Qatar. Since then, Iran has multiplied the targeting of Gulf energy infrastructure with the logical consequence of the price of oil and gas sharply rising. This increase of energy prices might be just the beginning since the situation in the Strait of Hormuz has the potential of a dramatic worsening.
It is quite telling that the U.S. has offered from the beginning as a solution to the thorny Hormuz matter to protect the ships that would like to cross the Strait. While this would be a very complicated to achieve if at all, no military option has been suggested. Wouldn’t it be easier to focus on targeting the Islamic Revolutionary Guard Corps (IRGC) bases directly on the strait along with a campaign to sink all Iranian warships? Precision strikes on Revolutionary Guard bases near the Strait could degrade Iran’s capability. The fact that it has not been implemented means in a way that Iran has the upper hand in Hormuz. This is far from reassuring not only for the success of a western military victory in the Strait but also for the world’s economy and global investors.
The announcement of six western countries committing to secure the strait is nonetheless not a full-proof solution. One should not underestimate the extremism of the regime even at a lower level that could decide to go all in and use sea mines. In fact, the IRGC has transformed the narrow waterway into a latent minefield. With an estimated 5,000 to 6,000 naval mines at its disposal and facilities positioned along both approaches to the Strait, the IRGC possesses the capability to seal off this vital artery within hours. What makes this threat particularly insidious is not Iran’s ability to deploy the mines, but the U.S.’ limited capacity to remove them.
The Pentagon’s minesweeping fleet is insufficient for the scale of threat it would face. Clearing thousands of mines from contested waters could require months or up to a year of painstaking work; time during which global oil markets would convulse, insurance premiums would soar even more prohibitively, and tanker traffic would grind to a halt.
The economic implications are staggering. Even a brief closure of the Strait would hammer global energy markets, likely triggering price spikes that make previous oil crises look mild, with the barrel possibly reaching anywhere between 150$ and 200$. Asian economies, hooked on Gulf crude, would be hit first. From there, the chaos would bleed into global manufacturing and shipping, likely plunging the world into a dramatic recession.
Iran doesn’t need to win a naval battle. By dumping cheap mines in the Strait, Tehran can freeze not only 20 per cent of the world’s oil but also 5 per cent of global trade. It’s the ultimate asymmetric play: dirt cheap, total gridlock. One wrong move could devastate the global economy for years after the shooting ends. All the air and sea power in the world won’t matter once the slow, grinding math of mine warfare takes over.
Ignoring Iran’s past warnings of retaliation against Israel and the Gulf countries, including energy targets was a grave mistake. Not envisioning a possible Iranian sea mining operation of the Strait of Hormuz could be even more dramatic.