The previous column in this series examined the factors that are increasing tensions between Iran and the United States. They include political uncertainty in Iraq, economic problems in Iran, and a hardening of the Barack Obama administration's stance (see "America, Israel, Iran: a shifting risk", 22 December 2011).
These issues, the column suggested, "do not make war imminent or inevitable. But they do suggest that a move to a more uncertain period is occurring, where tensions can rise rapidly - especially if vested interests seek to raise them, perhaps even to the extent of precipitating war." It concluded that "the early months of 2012 might see more rational engagement, something certainly to be hoped for. But equally they could see a sudden crisis erupt in a way that soon becomes dangerous and even catastrophic."
A week later, reports of consultation between the US and Israel over potential strikes on Iranian nuclear facilities underline the seriousness of this moment (see "Israel, U.S. discuss triggers for military strike on Iran", Ha'aretz, 28 December 2011). To repeat: this does not mean that war is imminent, but it does indicate that the balance of danger is tipping in that direction.
A direct challenge
This trend is reinforced by congressional votes in the United States to tighten sanctions on Iran even further. The proposed measures are aimed specifically at damaging Iranian oil-and-gas exports (see David E Sanger & Annie Lowrey, "Iran Threatens to Block Oil Shipments, as U.S. Prepares Sanctions", New York Times, 27 December 2011). The exceptional degree of congressional support makes legal consequences probable, though the Obama administration will also undertake a variety of efforts to limit the impact on world oil prices. Among the options are hastening Libya's re-entry into world markets, encouraging Angola and Saudi Arabia to increase production, and even seeking to increase Iraqi oil exports (difficult though that may be).
The Iranian economy is crucially dependent on oil-and-gas export revenues, so Tehran is understandably very concerned about the prospect of seeing its sphere of economic activity further restricted - even if it takes comfort from knowing that China, its largest customer, will not participate in the new sanctions regime. Yet it sees the US move as a direct challenge, and the threats to close the crowded waters of the Straits of Hormuz can be seen as part of Iran's retort.
Iran's wider contribution to the current escalation includes the launch on 24 December of naval exercises around the Straits and into the Gulf of Oman, designed to last ten days; these include mine-laying, which would be central to any action aimed at disrupting shipping. Inevitably, the US has responded by making it clear that it would take determined action to keep the Straits open. The rhetoric may stay just that, though it raises the question of whether Iran is capable of closing the Straits and thereby blocking much of the world's most important oil-supply route.
A deficit and three assets
In practice, Iran's military outlook is unfavourable. Its navy may have a mine-laying capacity, but with just a handful of frigates, submarines and support-vessels is the smallest of the country's three regular military forces. Its air force is larger, but the great majority of its aircraft are obsolete and many are unserviceable.
But Iran does possess three assets that must be weighed in the balance. The first is that the Iranian Revolutionary Guards Corps (IRGC, or Pasdaran) has anti-ship capabilities, separately from the regular forces. These (and elements of the navy, to a lesser extent) have in recent years focused on developing "asymmetric warfare" approaches such as the use of small speedboats, and use of small vessels surreptitiously to lay mines. The Pasdaran may also have "martyr units" that might prove very difficult to counter (see "Asymmetric war: Iran and the new normal", 27 July 2010).
The second is that Iran has forged a close relationship with China in one specific area - the purchase and deployment of mobile land-based anti-ship missiles. It has also acquired external expertise in developing its own missiles; this was evident at the start of the Israel-Hizbollah conflict in July-August 2006, when one of the Israeli navy's most modern warships was badly damaged by a short-launched missile believed to have originated in Iran. Of all Iran's military capabilities relevant to action against shipping-lanes, highly mobile land-based missiles may be the most problematic.
The third asset is that Iran's armed forces, whether regular or irregular, can have a pronounced impact on world oil prices without actually being able to close the Straits of Hormuz for any length of time - for even the threat to do so, supplemented by a few small-scale actions that reinforce the threat, would be sufficient. This would in turn almost certainly be enough to prompt substantial retaliatory action by the hugely more powerful United States navy.
This is what happened towards at the end of the Iran-Iraq war in April 1988, when - after both Iraq and Iran had (in the so-called "tanker war") targeted commercial-tanker traffic - the US effectively intervened on the side of Saddam Hussein's Iraq, inflicting serious damage on the Iranian navy's surface forces.
A missing link
Again, the current serious tensions do not make an armed conflict with Iran inevitable or even very likely. In practice there may even be a lower risk than at the most nervous period of the post-2001 decade, the winter of 2006-07. This is because the danger lies (as previously argued) in inadvertence, miscalculation or even accident rather than in deliberate large-scale action. Uncertainty, therefore, is the order of the day.
The end of the military exercises in the first days of 2012 may allow the immediate peril to subside a little. Yet it is worth recalling here a troubling aspect of the wider strategic background: that the US and Iran do not have a direct hotline facility for handling incidents at sea. This is an aid to crisis-control that can be hugely useful in circumstances such as these. Just now, it is badly needed.