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0 Iran and the West Rediscover Oil as Weapon

Four decades after the 1973 oil shock, Iran and the West are once again embracing oil as a weapon. Tehran is threatening to block the Strait of Hormuz, while the industrialized countries are considering a boycott of Iranian oil. But both sides will suffer if such tactics are used.

Surprisingly enough, supertankers don't burn very well. Although the crude oil they transport is highly flammable, there is not enough oxygen in their tanks to create an explosive mixture.
On average, 14 of these giant tankers pass through the Strait of Hormuz, located between Iran and Oman, every day. If Iranian President Mahmoud Ahmadinejad actually ordered his forces to fire missiles at one of these tankers, quite a bit of firepower would be needed to set off a Hollywood-style inferno.
But the verbal attacks from Tehran are more than sufficient to set the global markets ablaze.
Last week, prices climbed significantly above the $100-a-barrel mark once again, despite all gloomy economic forecasts. Gasoline prices already reached an all-time high in Germany in 2011. And now the dispute over who controls the Persian Gulf, which has been triggered by Iran's nuclear policies, is a sign that further escalation is on the horizon.
For a full 10 days, from Christmas Eve until after the beginning of the new year, the Iranian navy held nautical maneuvers in an area traversed by the most important route in the international oil business. About a third of all the crude oil shipped worldwide passes through this bottleneck. Vice President Mohamed Reza Rahimi warned that if the West imposed further sanctions against Iranian oil exports, Tehran would not allow "a drop of oil" to pass through the Strait of Hormuz.
But sanctions are precisely what the industrialized countries have in mind. On New Year's Eve, US President Barack Obama signed legislation that prohibits anyone who intends to do business with the United States in the future from having any dealings with Iran's central bank. The law is intended to prevent Tehran from making any oil-related transactions.
It became clear last week that when the foreign ministers of the European Union countries meet later in January, they could very well tighten the sanctions even further, so that the 27 member states will no longer buy a single barrel of oil from Iran. French Foreign Minister Alain JuppĂ© assured that the negotiations over the sanctions are "on the right track."

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