What Could Iran’s Countermeasures Be in Response to U.S. Economic Pressure?

Iran has warned of possible retaliation after the United States threatened to impose tougher sanctions on Tehran. Iran has indicated that if economic pressure increases, it could further reduce oil exports and disrupt shipping through the strategically important Strait of Hormuz. Reuters reported the development on Monday.

Mohsen Rezaei, a former commander of Iran’s Revolutionary Guards, said that if the economic war continues, Iran would not allow even a drop of oil to be exported through the Strait of Hormuz or the Persian Gulf.

The Strait of Hormuz is one of the world’s most important oil shipping routes. Before the war, nearly one-fifth of global energy supplies passed through the waterway. However, shipping traffic has already declined significantly because of Iranian attacks and threats.

If sanctions intensify, Iran could also target oil and gas facilities in Gulf countries. At the same time, pressure on shipping in the Red Sea could increase through the Houthis, Iran’s allies in Yemen.

Such measures could further reduce oil supplies from the Middle East to global markets, raising the risk of higher international oil prices.

Despite the threat of new sanctions, oil prices fell on Monday. Analysts said the new sanctions are not being implemented in full immediately. In addition, China, one of Iran’s largest oil buyers, has not completely halted trade with Tehran. Prices also declined as some investors took profits after the recent rise.

However, if Iran further restricts shipping through the Strait of Hormuz or causes major disruptions to oil supplies in response to the sanctions, oil prices could rise sharply again in the global market.

Tehran has also claimed that China and Russia have rejected the latest U.S. measures. Washington’s position toward China is particularly important because China is Iran’s largest oil buyer. Direct sanctions on Chinese banks could trigger renewed tensions in U.S.-China trade relations.

Meanwhile, there has been no diplomatic resolution to the conflict involving the United States, Israel and Iran, which has continued for nearly six months. Although Iran’s military capabilities have been weakened by the conflict, the country still has the capacity to use missiles and drones. As a result, concerns remain over possible attacks in the Gulf region and disruptions to oil tanker traffic through the Strait of Hormuz.

Source: Reuters