Iran warns of closing strategic Hormuz oil route

[December 29, 2011]  TEHRAN, Iran (AP) -- Iran's navy chief warned Wednesday that his country can easily close the strategic Strait of Hormuz at the mouth of the Persian Gulf, the passageway through which a sixth of the world's oil flows.

It was the second such warning in two days. On Tuesday, Vice President Mohamed Reza Rahimi threatened to close the strait, cutting off oil exports, if the West imposes sanctions on Iran's oil shipments.

In response, the Bahrain-based U.S. 5th Fleet's spokeswoman warned that any disruption "will not be tolerated." The spokeswoman, Lt. Rebecca Rebarich, said the U.S. Navy is "always ready to counter malevolent actions to ensure freedom of navigation."

With concern growing over a possible drop-off in Iranian oil supplies, a senior Saudi oil official said Gulf Arab nations are ready to offset any loss of Iranian crude.

That reassurance led to a drop in world oil prices. In New York, benchmark crude fell 77 cents to $100.57 a barrel in morning trading. Brent crude fell 82 cents to $108.45 a barrel in London.

"Closing the Strait of Hormuz is very easy for Iranian naval forces," Adm. Habibollah Sayyari told state-run Press TV. "Iran has comprehensive control over the strategic waterway," the navy chief said.

The threats underline Iranian concern that the West is about to impose new sanctions that could target Tehran's vital oil industry and exports.

Western nations are growing increasingly impatient with Iran over its nuclear program. The U.S. and its allies have accused Iran of using its civilian nuclear program as a cover to develop nuclear weapons. Iran has denied the charges, saying its program is geared toward generating electricity and producing medical radioisotopes to treat cancer patients.

The U.S. Congress has passed a bill banning dealings with the Iran Central Bank, and President Barack Obama has said he will sign it despite his misgivings. Critics warn it could impose hardships on U.S. allies and drive up oil prices.

The bill could impose penalties on foreign firms that do business with Iran's central bank. European and Asian nations import Iranian oil and use its central bank for the transactions.

Iran is the world's fourth-largest oil producer, with an output of about 4 million barrels of oil a day. It relies on oil exports for about 80 percent of its public revenues.

Iran has adopted an aggressive military posture in recent months in response to increasing threats from the U.S. and Israel that they may take military action to stop Iran's nuclear program.

The navy is in the midst of a 10-day drill in international waters near the strategic oil route. The exercises began Saturday and involve submarines, missile drills, torpedoes and drones. The war games cover a 1,250-mile (2,000-kilometer) stretch of sea off the Strait of Hormuz, northern parts of the Indian Ocean and into the Gulf of Aden near the entrance to the Red Sea as a show of strength and could bring Iranian ships into proximity with U.S. Navy vessels in the area.

Iranian media are describing how Iran could move to close the strait, saying the country would use a combination of warships, submarines, speed boats, anti-ship cruise missiles, torpedoes, surface-to-sea missiles and drones to stop ships from sailing through the narrow waterway.

Iran's navy claims it has sonar-evading submarines designed for shallow waters of the Persian Gulf, enabling it to hit passing enemy vessels.

A closure of the strait could temporarily cut off some oil supplies and force shippers to take longer, more expensive routes that would drive oil prices higher. It also potentially opens the door for a military confrontation that would further rattle global oil markets.

Iran claimed a victory this month when it captured an American surveillance drone almost intact. It went public with its possession of the RQ-170 Sentinel to trumpet the downing as a feat of Iran's military in a complicated technological and intelligence battle with the U.S.

American officials have said that U.S. intelligence assessments indicate the drone malfunctioned.

[Associated Press; By ALI AKBAR DAREINI]

Additional reporting from Adam Schreck in Dubai, UAE.

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