With the EU agreeing a new round of sanctions on Iran – outlawing European oil and gas purchases from Iran in six months, freezing Iran's Central Bank and banning trade in gold and other precious metals with any state-related bodies – tensions between Iran and the West are increasing. An Iranian MP has – again – warned that Iran will close the Strait of Hormuz and the US administration has – again – said that such an action will be countered. But what would happen if Iran carried out its threat?
Iran has noteworthy littoral warfare capabilities, including mines, anti-ship cruise missiles, and land-based air defence. If Iran uses these capabilities smartly, it could probably impede traffic in the Strait of Hormuz for some time: maybe days, maybe weeks. This would cut off a quarter of the world's oil and thus send oil prices skyrocketing. Recession would follow. A closure would, however, also hurt Iran – something like 70 per cent of Iran’s budget revenues are generated by oil exports, all of which must transit the Strait.
US-led efforts to reopen the Strait would escalate rapidly into sustained, large-scale air and naval operations during which Iran could impose significant economic and military costs on the US and its forces. Think of a flotilla of Basij-crewed boats heading, kamikaze-style, towards US ships. Think USS Cole-style attacks.
Ultimately, however, Iran would lose the fight. It has neither the capabilities nor the resources to sustain a confrontation with the West. You can’t win a maritime conflict against the US Fifth Fleet using ‘Basij Boats’. Having lost, the Iranian regime would probably face an internal challenge and be vulnerable to attacks on its nuclear facilities by Israel or the US.
For these reasons, Iran is unlikely to push its luck. But there is another reason too. The blockade is Iran's anti-strike deterrent, the threat it brandishes when it thinks an attack on its nuclear facilities is imminent. If Iran closes the Strait now and loses a subsequent naval confrontation with the US, what would it have left as a deterrent? Hezbollah attacks on Israel? Terrorism in Europe? Neither is likely to win Iran any favours or sway the West. Quite the opposite. It would probably broaden the conflict, drawing in more states and leading to calls for the US to target nuclear and military installations on the Iranian mainland and for ‘decapitation strikes’ against the Iranian regime.
Short-term and medium-term, therefore, Iran loses more from closing the Strait of Hormuz than the West, though any conflict will not be easy or casualty-free for either side. Iran's regime is many things but it is not irrational. Or, at least, it hasn't been yet.