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US aircraft carrier Iran Strait of Hormuz
The aircraft carrier USS John C Stennis and another vessel exited the Gulf through the Hormuz Strait a week ago. Photograph: Handout/REUTERS
The aircraft carrier USS John C Stennis and another vessel exited the Gulf through the Hormuz Strait a week ago. Photograph: Handout/REUTERS

Oil prices soar as Iran warns US aircraft carrier away from Persian Gulf

This article is more than 12 years old
Prices rise worldwide amid concerns that tensions between US and Iran over key oil route could lead to supply disruptions

Iran's army chief on Tuesday warned an American aircraft carrier not to return to the Persian Gulf in Tehran's latest tough rhetoric over the strategic waterway, part of a feud with the United States over new sanctions that has sparked a jump in oil prices.

General Ataollah Salehi spoke as a 10-day Iranian naval exercise ended near the Strait of Hormuz at the mouth of the Gulf. Iranian officials have said the drill aimed to show that Iran could close the vital oil passage, as it has threatened to do if the United States enacts strong new sanctions over Iran's nuclear programme.

But a defence spokesman said the United States will continue to deploy its warships in the Gulf.

"These are regularly scheduled movements and in accordance with our long-standing commitments to the security and stability of the region and in support of ongoing operations," Commander Bill Speaks said in an emailed response to Reuters.

"The US Navy operates under international maritime conventions to maintain a constant state of high vigilance in order to ensure the continued, safe flow of maritime traffic in waterways critical to global commerce," he said.

The strait, leading into the Gulf of Oman and Arabian Sea, is the only possible route for tankers transporting crude from the oil-rich states of the Persian Gulf to markets. A sixth of the world's oil exports passes through it every day.

Oil prices rose to over $101 a barrel Tuesday amid concerns that rising tensions between western powers and Iran could lead to crude supply disruptions. By early afternoon in Europe, benchmark crude for February delivery was up $2.67 to $101.50 a barrel in electronic trading on the New York Mercantile Exchange.

The jump came a day after Iran test-fired a surface-to-surface cruise missile as part of the manoeuvres, prompting Iran's navy chief to boast that the strait is "completely under our control."

Salehi's warning for the US aircraft carrier not to come back seemed aimed at further depicting the strait and the Gulf as under Iran's domination, though there was little way to enforce his warning without military action. The strait is divided between Iran and Oman's territorial waters, and international law requires them to allow free passage through it.

"We recommend to the American warship that passed through the Strait of Hormuz and went to Gulf of Oman not to return to the Persian Gulf," Salehi was quoted as saying by the state news agency IRNA.

He said Iran's enemies have understood the message of the naval exercises, saying, "We have no plan to begin any irrational act but we are ready against any threat."

The aircraft carrier USS John C Stennis and another vessel exited the Gulf through the Hormuz Strait a week ago, after a visit to Dubai's Jebel Ali port, according to the US Navy's Bahrain-based 5th Fleet. The Fleet did not immediately respond to requests for comment on Salehi's warning.

Iran's sabre-rattling over the strait and the Gulf has come in response to US preparations to impose tough new sanctions that would ban dealings with Iran's Central Bank. That would deeply hurt Iran's oil exports since most countries and companies use the bank to conduct purchases of Iranian crude.

Iran relies on oil revenues for around 80% of its budget, meaning a cut-off would be devastating to its already weakening economy.

President Barack Obama has signed the sanctions into law but has not yet enacted them. The sanctions would be the strongest yet by the US, aimed at forcing Tehran to back off its nuclear program, which many in the West say is intended to produce a nuclear weapon. Iran denies the claim, saying its program is peaceful.

French Foreign Minister Alain Juppe said Tuesday that is country wants Europe to agree on similar sanctions against Iran by January 30 to show its determination to stop Iran from developing a nuclear weapon. He told the French television station i>TELE that there is "no doubt" that Iran is continuing with plans to build a bomb.

Iran's naval maneuvers took place over a 1,250-mile stretch of water beyond the Strait of Hormuz at the mouth of the Persian Gulf, as well as parts of the Indian Ocean and the Gulf of Aden, according to Iranian officials.

A leading Iranian lawmaker said Sunday the maneuvers served as practice for closing the strait if the West enacts sanctions blocking Iranian oil sales. Top Iranian officials made the same threat last week.

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