Iran has received a lot of attention lately for its threat to close down the Strait of Hormuz, a strategic choke point in the world’s energy supply. It has spurred a broad range of responses from Republican presidential candidate Mitt Romney declaring such a move “an act of war” to President Obama sending an aircraft carrier through the area as a show of strength.
An Iranian closure of Hormuz would have a pretty substantial impact on the world economy. The price of oil would almost certainly spike: Iran is the fifth largest oil producer in the world, and 20 percent of the world’s daily supply of oil go through the strait each day. And many countries will panic at the price increase and constricted supply. Oil traders recently speculated that closing the Strait could increase prices by $50 per barrel or more.
The U.S., however, can weather such a scenario. Less than 20 percent of America’s oil imports go through the Strait. And imports account for less than half of U.S. consumption, which means closing the Strait would only restrict about 10 percent of America’s supply of oil (most imported oil comes from Canada, Mexico, Venezuela, and Saudi Arabia). While leaders should be wary of any threats Iran makes, it’s important to keep in mind that closing the Strait of Hormuz would most likely have only a limited impact on the U.S. economy.
Closing the Strait of Hormuz would affect mostly Iran, and its largest customers. According to Reuters, China imports about half of its oil through the Strait, and Japan imports nearly three-quarters of its oil. Both of those countries have far bigger stakes in keeping the Strait open. So why is the United States government leading the global outrage over Iranian threats?
For one, the sheer volume of oil going through Hormuz makes it “the world’s most important oil transit chokepoint,” according to the U.S. Energy Information Agency. In other words, so much oil moves through this area that even threatening a disruption can have ripples in the global energy market.
For another, the U.S. has an overpowering military presence in the Persian Gulf. The Fifth Fleet, based in Bahrain, constitutes a military force larger than most nearby states: thousands of sailors and other personnel on dozens of ships. So there is an expectation that, as the primary guarantor of security in the region, it’s the U.S.’s responsibility to keep the sea lanes open.
But here’s the thing: why does that have to be the case? Unlike the U.S., China has far better relations with the regime in Tehran. In addition to selling weapons to Iran, China is also a major oil customer. Plus, Chinese companies have a growing presence in Iran. China, in other words, has the kind of leverage over Iran that the U.S. would need to prevent a closure of the Strait.
Similarly, Japan has an even greater stake in keeping the Strait open. Yet while Japan enjoys much warmer relations with Iran than the U.S., it still relies on the U.S. to take the lead in exerting pressure on Iran.
It’s time to stop letting powerful, wealthy countries free-ride on the U.S. in the Persian Gulf. Closing the Strait of Hormuz is a disaster, not so much for the U.S., but for Asia. Asia should therefore take the lead in addressing Iranian concerns and ratcheting down tension.
Time seems to be running out in the Gulf. Israel is making no secret of its intentions should Iran acquire nuclear weapons, and the Hormuz closure threat has everyone on edge about what could happen next. Meanwhile the U.S., the country with arguably the least influence over Iran after Israel, has been left as the lead country pushing for more sanctions over Iran’s nuclear program, and the only country even contemplating concrete steps to respond to a Strait closure.
By stepping back and asking friendly countries like China to step in, the U.S. can de-escalate tensions in the Gulf while pressing emerging powers to shoulder the responsibility of maintaining access. It cuts against the American desire to take the lead, I know. But it’s also the best way to ensure the free flow of goods through this vital area.
Joshua Foust is a fellow at the American Security Project and a columnist at TheAtlantic.com.