Wednesday March 26, 2014

I've Been Thinking:

Iran always thinks strategically. And the move they just made is brilliant.

According to ISNA, the official government Iranian Student News Agency, Iran is planning to open an oil shipping terminal outside the straits of Hormuz, in Bandar Jask on the Gulf of Oman.

It will be the second oil terminal Iran has opened outside of
Hormuz. The first is on the island of Khark.

Why is this move so brilliant? Because it protects Iranian national interests.

Somewhere between 20% and 25% of the daily supply of oil for the entire world goes through the Straits of Hormuz. And Iran is in control of the Straits.

But Iran has threatened to shut down the Straits. If they did indeed shut them down, it would impact their own oil exports. But if Iran had its own outlet for oil, an outlet that avoided the Straits, they would be free to close the Straits of Hormuz at any time without any real economic risk.

The price of crude oil would skyrocket and Iran could continue to supply the market. A win win for Iran.

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