Iran building bases to 'protect' Strait of Hormuz

Iran has begun building a line of naval bases along its southern coast and down to the Strait of Hormuz at the entrance to the strategic Gulf oil waterway, according to a senior Iranian official.

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Nov. 3 -- Iran has begun building a line of naval bases along its southern coast and down to the Strait of Hormuz at the entrance to the strategic Gulf oil waterway, according to a senior Iranian official.

"The new mission of the navy is to build an impenetrable line of defense at the entrance to the Sea of Oman," said Rear Admiral Habibollah Sayyari.

"If the enemy goes insane," Sayyari said, "we will drown them at the bottom of the Indian Ocean and the Sea of Oman before they reach the Strait of Hormuz and the entrance to the Persian Gulf."

Sayyari, who last week opened a naval port at Jask, said Iran is constructing a string of naval bases on the Sea of Oman coast from Pasa Bandar, near the Pakistan border, to Bandar Abbas, Iran's major port on the Strait of Hormuz.

An estimated 40% of the world's oil passes through the Strait of Hormuz, a narrow channel between Iran and Oman which separates the Gulf of Oman and the Arabian Sea from the Persian Gulf.

Oil price targeted?
While an attack on shipping could block oil exports through the strait, at least one expert—suspicious of Iranian motives—has noted that the mere threat of an attack is enough to increase the price of oil.

"The cynic would say that any time Iranians say something about the Gulf, the oil prices go up, and they are oil exporters, so they are going to make some money," said Lee Willett, head of maritime studies at London's Royal United Services Institute.

Iranian officials have voiced concern over falling oil prices, saying on Nov. 3 that the country needs oil to average $60.60/bbl until March, the end of the current Iranian year, to avoid "big problems" in its economy.

"If the price of a barrel of oil in the 5 remaining months of the current year stays at an average of $60.60/bbl, we can pass this crisis soundly," said the deputy central bank governor for economic affairs Ramin Pashaei.

"Our economy will face big problems with any further drop" below $60.60/bbl," Ramin said.

Contact Eric Watkins at hippalus@yahoo.com.

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