Iran: A Situation Nation

Late last week, the US Aircraft carrier John Stennis left the Persian Gulf through the Strait of Hormuz that lies between Iran and Oman. The Carrier, along with another ship, left the Gulf as part of withdrawal operations in the region. Shortly before their departure an Iranian military spokesman stated that the US is not to return to the Gulf and will not receive another warning. The warning came after Iran finished weeks of naval exercises in the Strait. The Iranian Navy attempted to demonstrate that its forces can block passage into and out of the Strait despite the US military presence in the region.
The Persian Gulf is a vital artery for the flow of oil from the Middle East. Approximately 35-40% of all crude shipped by sea in the world passes through the Strait of Hormuz. For years the Persian Gulf has operated as an oil supply centre for nations other than Iran – Saudi Arabia, Kuwait, and UAE use the Gulf and the Strait to ship to Western markets. Iran has threatened to block the supply of crude from the Persian Gulf if the United States continues to put pressure on Iran for developing its Nuclear Programme. Political instability may cause crude prices to increase significantly given past trends in the sensitivity of oil prices to regional conflicts. Given the right conditions, supply and demand may take effect and a prolonged disruption caused by blocking exports out of the Gulf may drive oil prices higher than they are now if alternatives are not found.
Iran’s Nuclear Programme has been under investigation by the International Atomic Energy Agency (IAEA) since the 2000’s. Iran has continuously flip-flopped between letting inspectors see their nuclear facilities and kicking them out of the country. This has led some to believe that Iran is developing more enriched uranium stockpiles, not for use in nuclear power plants as they have claimed, but to build a nuclear bomb. This presents a problem since Iran is part of an international agreement to halt development and testing of nuclear weapons, which has been binding since 1968. As a member state, if they have been developing nuclear weapons they are liable to have further sanctions and actions imposed on them by other member states and the international community.
The situation between Western Nuclear Powers and Iran has been tense. The US, supported by the UN, has ratcheted up sanctions on Iran if they do not disclose the extent of their nuclear development. Sanctions have been ongoing since 1995 and show no signs of easing. The US and Iran do not formally have diplomatic relations and Iran has threatened to retaliate if economic sanctions continue. Sanctions are generally directed at Iran’s oil export program since about 80% of Iran’s revenue comes from its oil industry.
Iran obtaining nukes would give them privileged status in the region and they would join a handful of countries worldwide that possess nuclear weapons. Iran obtaining nukes would likely destabilize the region. Several Middle-Eastern powers have urged the US to intervene on their behalf to stop Iran from allegedly developing nuclear weapons. The US has kept their stance on the Iranian nuclear programme and would like to see it stopped.
If Iran’s nuclear programme is truly peaceful then they should have nothing to fear if the international community wants to assess Iran’s nuclear capabilities. However, should Iran develop nuclear fission power it would be a boon to Iran’s economy and provide them with a reliable source of power for the next several decades.
http://www.aljazeera.com/news/europe/2012/01/201211382815875531.html
http://hosted.ap.org/dynamic/stories/M/ML_IRAN_TALKING_TOUGH?SITE=NCBER&SECTION=HOME&TEMPLATE=DEFAULT
http://www.ctbto.org/member-states/country-profiles/?country=81&cHash=c783371cea