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Thursday, January 5, 2012 – Daily News By JONATHAN S. LANDAY AND KEVIN G. HALL McClatchy Newspapers WASHINGTON — The possibility of a con- frontation between the United States and Iran appeared to grow Tues- day after the Obama administration dis- missed an Iranian warn- ing against moving a U.S. aircraft carrier into the Persian Gulf, saying the deployment was cru- cial to "the security and stability of the region." Fears that a crisis could disrupt Gulf tanker traffic carrying 40 percent of the world's sea-borne oil drove international petroleum prices up by more than $4 a barrel, a potential threat to U.S. and global economies struggling to emerge from recession. The rising tensions come as the U.S. and Europe target Iran's cru- cial oil revenues for the first time in an intensifi- cation of sanctions against Tehran for rejecting repeated U.N. demands to halt its nuclear program. The program is widely thought to be secretly developing nuclear arms, which Iran denies. The Iranian currency, the rial, plunged to a record low against the U.S. dollar, reportedly triggering a run on banks by Iranians anx- ious to convert their savings into the Ameri- can currency before the exchange rate worsens. Gen. Ataollah Salehi, the Iranian army chief, warned that Iran would take unspecified action if a nuclear-powered aircraft carrier, the USS Stennis — which leads a strike group of five war- ships — re-enters the Gulf. The carrier depart- ed the waterway last week as Iran conducted naval exercises. "We recommend and warn the aircraft carrier not to return to its previ- ous position in the Per- sian Gulf," Press TV, a state-run English-lan- guage satellite news channel, quoted Salehi as saying. "We are not in the habit of repeating a warning and we warn only once." The United States rejected the warning, declaring that "the deployment of U.S. mil- itary assets in the Per- sian Gulf will continue as it has for decades." 3B Possible showdown with Iran sends oil prices soaring "These are regularly scheduled movements in accordance with our long-standing commit- ments to the security and stability of the region and in supporting ongoing operations," Pentagon spokesman George Little said in a statement. White House spokesman Jay Carney sought to minimize the threat, portraying it as a bid by Iran to divert its people's attention from their worsening eco- nomic plight and grow- ing international isola- tion. Salehi's comments are "confirmation that Tehran is under increas- ing pressure," Carney said. Ian Bremmer, the president of the Eurasia Group, which advises corporations on foreign policy risks, said he thought the Iranian threat amounted to blus- ter because of the harm that a confrontation with the United States would do to Iran's strug- gling economy. "It would be econom- ic suicide for them, but they are absolutely will- ing to push the needle here because the stakes are high and they are being squeezed," he said. But Vali Nasr, a for- mer State Department adviser who's with Tufts University's Fletcher Have a news tip? 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Moreover, by saying that Iran wouldn't issue the United States anoth- er warning, Salehi's statement appeared to box in Tehran, limiting its diplomatic options and opening the regime to ridicule at home if it fails to make good on its pledge to act if the Sten- nis returns. The latest frictions follow threats by Iran to blockade the Strait of Hormuz, the narrow passageway at the Gulf's southern end, if the West imposes an oil embargo on Iran, a move that the European Union is expected to take later this month. But French Foreign Minister Alain Juppe, speaking Tuesday in a television interview, said the 27-nation EU should impose even harsher sanctions. An EU diplomat, who spoke only on the condi- tion of anonymity because of the sensitivi- ty of the issue, said Juppe wanted the bloc to follow the lead of the United States, which imposed new sanctions last week that deny access to the U.S. finan- cial system to foreign entities that do business with Iran's central bank, which handles most payments for Iranian oil and gas exports. The exports account for some 60 percent of Iran's economy. The legislation repre- sented a major expan- sion of unilateral U.S. sanctions against Iran, which also is under EU measures and four rounds of U.N. sanc- tions. However, the EU, which imports roughly one-quarter of its oil from Iran but has been shifting to other suppli- ers, is split over target- ing the Iranian central bank, the diplomat said. Nasr said that target- ing Iran's main source of revenue was pushing "the stakes higher than they've ever been. Never before have they actual- ly been cut out of the oil market." "Things have changed," Bremmer said. "The countries that actually get oil from Iran in Europe have new governments that are prepared to take a hard- er line." Even China, which has been one of Iran's few major defenders by pushing for watered- down U.N. sanctions, has reduced its purchas- es of Iranian oil and is relying on Saudi Arabia to make up the differ- ence. Saudi Arabia, no friend of Iran, is pro- ducing 9.5 million to 10 million barrels per day of oil, according to Saudi and OPEC data. The kingdom has pro- duction capacity in the range of 11.5 million to 12 million barrels per day, and it's widely con- sidered the oil producer of last resort. "The Saudis should be able to just about make it up," said John Kilduff, a veteran oil analyst for Again Capi- tal in New York. "The good news is that the Iranian oil and Saudi oil are pretty much the same composition." U.S. military officials expressed little worry that Iran could close the Strait of Hormuz for long given the American naval presence in the region and the economic costs to Iran. However, Iran could disrupt ship- ping traffic — and keep global oil prices high — by releasing mines into the strait or simply announcing that it had done so. Either act could com- pel the United States to deploy a task force of minesweeping heli- copters and ships now stationed in Manama, Bahrain. Those vessels and aircraft could be vulnerable to Iranian attacks, however, forc- ing the deployment of a protective screen of additional American ships. Such a step would cost the U.S. military much more than the cost to Iran of dispensing mines. The Stennis strike group steamed out of the Gulf on Dec. 27 into the Arabian Sea, where its aircraft have been supporting U.S.-led operations in Afghanistan. It departed as Iran conducted a 10- day naval exercise in the southern portion of the waterway during which it test-fired missiles. Little, the Pentagon spokesman, made it clear that the flotilla wouldn't be deterred from returning, saying that U.S. Navy vessels would be operating "under international maritime conventions . . . to ensure the contin- ued, safe flow of mar- itime traffic in water- ways critical to global commerce."