The European Union enacted Oil sanctions against Iran Sunday. It was the largest round of sanctions in OPEC history since the Libyan sanctions.
Now, Iran is serious. The price of milk, eggs, and bread has already risen 20% since Sunday and chicken costs 80% more.
A senior member of the Iranian parliament just floated the idea out that Iran would dare to take and close the Strait of Hormuz if this goes on any longer, according to Azerbaijani news source Trend.az.
In preparation for possible conflict Tehran is preparing a ballistic missille war game to prepare for a counterattack dhould the U.S. or Israel strike.
This, after the country's National Security and Foreign Policy Committee drafted a bill to stop all tankers from passing through the Strait of Hormuz.
"We take the control of the Hormuz Strait. If we are supposed to be sanctioned, we will not allow a drop of oil to pass through the strait," said MP Arsalan Fathipour. "In such a situation, oil price will surge and we will see that those who have imposed sanctions will not be able to be accountable for their people."
That would be catastrophic to the world financial system. Around 20% of the world's oil passes through the Strait.
Even reducing traffic through the narrow body of water could cause the price of oil to rise dramatically across a world where economic recovery remains at best tenuous.
The threat is the latest in a buildup on both sides of the dispute. Lately, the United States has sent multiple ships to the area around the Strait.
Most telling is the deployment of four minesweepers to the area near the strait, indicating that the U.S. is plausibly worried that Iran may passively take the Strait by mining it. The Navy has also sent over new missile to ships in the area.
A pipeline recommissioned by Saudi Arabia, designed to circumvent shipping lanes by Iraq, reentered service recently in recognition of the plausible threat that Iran posed to international oil distribution. Still, that pipeline would only likely blunt the blow.
Finally, a recent Foreign Military Sale of Terminal High Altitude Air Defense (THAAD) missile interceptor systems to the United Arab Emirates — a nation which comprises the other shore of the Strait of Hormuz — shows that the United States may be bracing for a larger scale attack on the Strait.
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