Townhall.com posted an Associated Press report on recent tensions in the Straits of Hormuz. Iran is conducting military exercises in the Straits supposedly practicing closing the Straits, which the Iranians have threatened to do if Western countries impose economic sanctions because of Iran’s nuclear program. America has stated that it will not tolerate any disruptions to the Straits. Excuse my skepticism, but based on how America has handled the entire nuclear program in Iran, I am not sure how seriously America’s statement will be taken.
The article reports:
The U.S. Congress has passed a bill banning dealings with the Iran Central Bank, and President Barack Obama has said he will sign it despite his misgivings. Critics warn it could impose hardships on U.S. allies and drive up oil prices.
The bill could impose penalties on foreign firms that do business with Iran’s central bank. European and Asian nations import Iranian oil and use its central bank for the transactions.
Iran is the world’s fourth-largest oil producer, with an output of about 4 million barrels of oil a day. It relies on oil exports for about 80 percent of its public revenues.
The interesting part of the above statement is that Iran relies on oil exports for about 80 percent of its public revenues. The question is simple–“Would Iran be willing to cut off 80 percent of its revenue in order to continue its nuclear program?” Are we leading up to a situation similar to what we had in Iraq’s ‘food for oil’ program, where the leaders on the country will live very well and the people will starve?
I am making no bets on who will blink first.
I hate to admit that blogging has contributed to some cynicism on my part, but it has. I am really not sure if you put the fact that today is Thursday up for a vote in the Senate you could get a 100-0 vote. Therefore, the fact that something was voted on unanimously totally got my attention.
On December 1, 2011, the Senate voted to add Amendment 1414 to S.1867 (National Defense Authorization Act for Fiscal Year 2012 ). According to Thomas.gov The purpose of the amendment is to require the imposition of sanctions with respect to the financial sector of Iran, including the Central Bank of Iran.
Today’s Wall Street Journal (I am not linking to the article because it is subscribers only) asks why the Obama administration is working behind the scenes to neuter the sanctions that the Senate passed.
The Obama Administration has a few reasons–officials have stated that they fear that U. S. trading partners will stop trading with America and continue trading with Iran, thus hurting American businesses. The Treasury claims that the sanctions could destabilize the world oil market, creating windfall profits for Iran. The way the amendment is currently written, the sanctions would take effect after 60 days. The President would have to issue three waivers to block them before the 2012 election (and explain to the American public why he is doing so). The Treasury wants to change the bill so that the sanctions take effect after 180 days, so President Obama would only have to waive them once before the 2012 elections.
So what is this about? If the sanctions increase the price of gasoline at the pump (where almost all Americans feel it), it might endanger the chances of President Obama for re-election. This is ridiculous. What do you think Iran’s obtaining nuclear weapons will do for President Obama’s chances of re-election and for our national security?