[Froufrou]

$2M a day?!

Ping!

[RightWhale]

If the Strait is blocked it would stop oil shipments from the Gulf, including most of Iran's. Iran would find itself without oil revenue, probably for a long time.

[Grampa Dave]

Ben, thanks for posting this very interesting "take/look" at the extra profit the Iranians have made this week by seizing the British sailors/Marines.

Probably at least 10% of the extra profits will find its way back to America to enrich the re election campaign funds of Pelosi, Murtha, Kerry, Reid, Durban, Waters and other rats in congress who hate America and President Bush, and the Rinos like Hagel.

[Proud_USA_Republican]

How much does Iran take a loss on as well because they have to import gasoline as well?

[Proud_USA_Republican]

"Escalating hostilities could also result in Iran blockading the Strait of Hormuz,"

That would last about 5 minutes.

[Chgogal]

FYI! The US War against Iran We Are Not Seeing

AMERICAN SANCTIONS BITE IRAN

By Ed Morrissey

As the UN Security Council voted to incrementally increase the sanctions on Iran this weekend, the efforts by the US to financially blockade Tehran continued to make a large impact on their own. The Bush administration has systematically locked Iran out of the global banking business, eliminating their ability to invest capital into their infrastructure and to fund terrorism:

More than 40 major international banks and financial institutions have either cut off or cut back business with the Iranian government or private sector as a result of a quiet campaign launched by the Treasury and State departments last September, according to Treasury and State officials.
The financial squeeze has seriously crimped Tehran's ability to finance petroleum industry projects and to pay for imports. It has also limited Iran's use of the international financial system to help fund allies and extremist militias in the Middle East, say U.S. officials and economists who track Iran.

The U.S. campaign, developed by Treasury Secretary Henry M. Paulson Jr. and Secretary of State Condoleezza Rice, emerged in part over U.S. frustration with the small incremental steps the U.N. Security Council was willing to take to contain the Islamic republic's nuclear program and support for extremism, U.S. officials say. The council voted Saturday to impose new sanctions on Tehran, including a ban on Iranian arms sales and a freeze on assets of 28 Iranian individuals and institutions.


The US has targeted the Revolutionary Guard with its attempts at isolating the Iranians. Mahmoud Ahmadinejad has transformed the Guard into an economic powerhouse in Iran, a major defense and civilian contractor even outside of its arms trading. This has made the Guard very loyal to Ahmadinejad, and the sanctions aim to both drive a wedge between the Guard and the president and also to cripple their ability to prop up the current regime.

In this, the US has received a great deal of assistance from a surprising source: Ahmadinejad himself. Global bankers who might otherwise have rejected American pressure to reduce their engagement with Tehran have either dropped their Iranian business or scaled it back sharply. Why? Ahmadinejad has made himself appear like a very risky investment partner, with his rantings about the Holocaust and wild statements about the destruction of Israel. Perhaps even more importantly, Ahmadinejad has undermined confidence in the Iranian stock exchange, comparing it to gambling. That doesn't make for an encouraging investment atmosphere even under the best of circumstances.

All of this results in a currency crunch for Iran. Importers now have to pay up front for their materials, having seen the normal credit environment disappear altogether. Banks will not issue loans or conduct capital investments into the oil infrastructure in Iran, which has now begun to crumble from years of poor maintenance. Iran can no longer generate the revenues of the past, which means that less money can go to radical Islamist terrorists like Hezbollah and Hamas. The situation has become so bad that Iran has worked to keep its name and the names of its banking institutions off of financial transactions in order to shield them from the prying eyes of the US.

The Bush administration has successfully conducted an indirect war on Iranian interests, and it is a progressive war. The effects of these efforts will be cumulative, and the Iranians have not much time left before their economy begins to completely collapse under the weight of them. Oil production accounts for 80% of their exports, and once those facilities start to fail, they will have nothing left with which to bargain -- and it will take years to repair the damage. When they reach that stage, Iranians will find plenty of motivation to shake off the disastrous reign of the mullahcracy, and even the Revolutionary Guard will not find much motivation to protect them. Monday, March 26, 2007

Links
http://www.frontpagemag.com/Articles/ReadArticle.asp?ID=27592

Iran Feels Pinch As Major Banks Curtail Business
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/25/AR2007032501084.html?nav=rss_world

[marron]

Escalating hostilities could also result in Iran blockading the Strait of Hormuz, where 20% of the world's oil passes.

Uh, no. You'll remember they tried that before, and it didn't work.

The flip side of that is the more likely scenario. If they don't hand the soldiers over, we'll close the Strait to Iranian shipping, while leaving it open and secure for all others. Iran won't be able to ship oil or receive gasoline, or anything else. Without oil income, and without sufficient gasoline to operate her economy, the pain will be transmitted and felt immediately.

The price of oil will spike temporarily, but Iran won't benefit from the higher prices.

[free from tyranny]

Just imagine the leverage the "mad mullahs" would wield if they had a several nuke tipped missles.

If Europe, the other most likely recipient of missle diplomacy, doesn't see the dangerous precedent, then the US must act alone to stop the Iranian thugs.