The U.S. strongly warned Iran on Wednesday against closing a vital Persian Gulf waterway that carries one-sixth of the world's oil supply, after Iran threatened to choke off traffic through the Strait of Hormuz if Washington imposes sanctions targeting the country's crude exports.
The increasingly heated exchange raises new tensions in a standoff that has the potential to spark military reprisals and spike oil prices to levels that could batter an already fragile global economy.
Iran's navy chief said Wednesday that it would be "very easy" for his country's forces to close the strategic Strait of Hormuz, the passage at the mouth of the Persian Gulf through which about 15 million barrels of oil pass daily. It was the second such warning by Iran in two days, reflecting Tehran's concern that the West is about to impose new sanctions that could hit the country's biggest source of revenue, oil.
"Iran has comprehensive control over the strategic waterway," Adm. Habibollah Sayyari told state-run Press TV, as the country was in the midst of a 10-day military drill near the strategic waterway.
The comments drew a quick response from the U.S.
"This is not just an important issue for security and stability in the region, but is an economic lifeline for countries in the Gulf, to include Iran," Pentagon press secretary George Little said. "Interference with the transit or passage of vessels through the Strait of Hormuz will not be tolerated."
Lt. Rebecca Rebarich, spokeswoman for the Bahrain-based U.S. Navy 5th Fleet, said the Navy is "always ready to counter malevolent actions to ensure freedom of navigation."
Iran's threat to seal off the Gulf reflect its concerns over the prospect that the Obama administration will impose sanctions over its nuclear program, sanctions that would severely hit its biggest revenue source. Iran is the world's fourth-largest oil producer, pumping about 4 million barrels a day.
Gulf Arab nations appeared ready to at least ease market tensions. A senior Saudi Arabian oil official told the Associated Press that they are ready to step in to offset any potential loss of exports from Iran.
The Saudi official's comment appeared to allay some concerns. The U.S. benchmark crude futures contract fell $1.98 by the close of trading Wednesday on the New York Mercantile Exchange but still hovered just below $100 per barrel.
U.S. State Department spokesman Mark Toner played down the Iranian threats as "rhetoric," adding, "We've seen these kinds of comments before."
While the Obama administration has warned Iran that it would not tolerate attempts to disrupt traffic through the Strait of Hormuz, U.S. officials do not think the situation will come to that. They doubt that Iran, which is already under increasing pressure from sanctions, would risk disrupting the Strait because doing so would further damage its economy.
Instead, the administration believes Iran is playing the only card it has left: issuing threats and attempting to shift focus away from its own behavior.
Congress has passed a bill that penalizes foreign firms that do business with the Iran Central Bank, a move that would heavily hurt Iran's ability to export crude. European and Asian nations use the bank for transactions to import Iranian oil.
President Obama has said he will sign the bill despite his misgivings. China and Russia have opposed such measures.