U.S. Foreign Policy: Strait of Hormuz Issues Require Careful Scrutiny

In The New York Times’s Opinion section, David Crist, a columnist, presented his view on the recent event in the Strait of Hormuz between the Iran Navy and the United States Navy. The Strait of Hormuz is a critical body of water as oil is transported through it.

The central concern of Mr. Crist involved the protection of the shipping lanes in the Strait of Hormuz.

After the 9/11 attacks, several European navies (as well as Australia’s and Canada’s) sent large forces to augment the United States effort in safeguarding the sea lanes of the Middle East from terrorism. The Bush administration should harness this coalition by asking them to let Tehran know through their own diplomatic channels that any attempt by the Revolutionary Guards to interfere with the free navigation of international waters will be treated no differently from a terrorist attack.

Strait of Hormuz (Courtesy of the University of Texas Libraries, The University of Texas at Austin)

 

However, the issue regarding the Strait of Hormuz is not as clear as Mr. Crist argues in his article. According to Dr. Kaveh Afrasiabi, in The Asia Times, there are no “international waters” in the Strait of Hormuz. The shipping lane is in Iran’s territorial waters.

Moreover, Dr. Afrasiabi explained that the United States Navy was citing advantageous provisions of the United Nations Convention of the Law of the Sea, which the United States has not ratified, while not considering provisions that are within Iran’s territorial interests.

Given that the approximately three-kilometer-wide inbound traffic lane in the Strait of Hormuz is within Iran’s territorial water, the US Navy’s invocation of “transit passage” harking back to the 1982 UN Convention on the Law of the Sea, (UNCLOS) is hardly surprising.

 

Although the US has yet to ratify the UNCLOS, it has been a strong advocate of its provisions regarding navigational rights, thus explaining the US officers’ availing themselves of “international law”.

 

[...]

 

However, irrespective of how Congress acts on the pending legislation on UNCLOS, the fact is that the US cannot have its cake and eat it. That is, rely on it to defend its navigational rights in the Strait of Hormuz and, simultaneously, disregard the various limitations on those rights imposed by the UNCLOS - and favoring Iran.

Dr. Afrasiabi explains the conflicting provisions of the UNCLOS as it applies to the Strait of Hormuz. The major issues involved are the ability to navigate through the Strait of Hormuz and the right of a state to protect land and waters within its territory.

As a result of events occurring in the Strait of Hormuz, people of good will must apply careful scrutiny of issues involving this area.

Foreign Affairs: Transcript of Nicolas Sarkozy’s Speech Before Congress

Please click here for the transcript of French President Nicolas Sarkozy’s speech before the U.S. Congress.

Iran: Nuclear Nonproliferation Treaty

There is discussion about whether Iran is potentially violating the Nuclear Nonproliferation Treaty.

The United Nations’s International Atomic Energy Agency (IAEA) has text of the treaty on its website.

The treaty article at issue is Article IV:

1. Nothing in this Treaty shall be interpreted as affecting the inalienable right of all the Parties to the Treaty to develop research, production and use of nuclear energy for peaceful purposes without discrimination and in conformity with Articles I and II of this Treaty.
2. All the Parties to the Treaty undertake to facilitate, and have the right to participate in. the fullest possible exchange of equipment, materials and scientific and technological information for the peaceful uses of nuclear energy. Parties to the Treaty in a position to do so shall also cooperate in contributing alone or together with other States or international organizations to the further development of the applications of nuclear energy for peaceful purposes, especially in the territories of non-nuclear-weapon States Party to the Treaty, with due consideration for the needs of the developing areas of the world.

Currency: Can Euro Replace U.S. Dollar as Reserve Currency?

The Bank of International Settlements, the bank for central banks, published a paper in 2006, titled “Euro as a Reserve Currency–a Challenge to the Pre-Eminence of the US Dollar.”

This is yet another document to consider as bellicose talk arises against Iran (for previous posts on Iran, please click the Iran category tag in the right column).

Iran: U.S Sanctions Against Iran Are Powerless; Iran’s Use of Euro Potential Cause of U.S.’s Antagonism

The Bush Administration announced its imposition of sanctions against the Iranian Government. According to the BBC, The Bush Administration alleges that a division of the Iranian military (Quds Brigade) supports terrorism and that Iran is “pursuing nuclear activities.” [Author's note: the U.S. Senate passed a non binding sense of the Senate resolution (S. Amdt. 3017) to state "that the United States should designate the Islamic Revolutionary Guards Corps as a foreign terrorist organization." (for full text of the resolution, as passed, click here (see pages S11827- S11828))].

Reaction to the decision of the Bush Administration was swift. Russian President Vladimir Putin stated that sanctions against are not necessary.

Arriving for a summit with European Union leaders, the Russian leader did not make any direct reference to the U.S. announcement, but he said the standoff with Iran will have to be resolved through patient talks.

‘Why worsen the situation and bring it to a dead end by threatening sanctions or military action?’ Putin asked. ‘Running around like a madman with a razor blade, waving it around, is not the best way to resolve the situation.’

According to the BBC, The Iranian government also disagreed with the sanctions.

Spokesman Mohammad Ali Hosseini said: ‘The hostile American policies towards the respectable people of Iran and the country’s legal institutions are contrary to international law, without value and, as in the past, doomed to failure.’

The head of the Revolutionary Guards, Mohammad Ali Jaafari, said the corps was ready to defend the ideals of the revolution more than ever before.

Ultimately, though, the sanctions are akin to a toothless tiger because the United States (U.S.) has had little contact with Iran since 1979. Also, Iran has its currency reserves (and prices its oil transactions) in Euros rather than the U.S. dollar. See BBC articles on this point here and here.

This currency issue is a crucial detail. Oil is priced in the U.S dollar, giving the U.S. a profound advantage. Here is a brief summary by Coilin Nunan. Pricing of oil in Euros threatens the superior power of the United States in the oil markets.

Those who threaten the U.S. dollar’s supremacy in oil transactions face serious consequences. Saddam Hussein, while President of Iraq, used the Euro in Iraq’s oil transactions. Iraq made billions as a result. Hussein also gained the ire of the United States (and war). [Note: For full discussion of this complex yet extremely important issue, read William Clark's book, "Petrodollar Warfare: Oil, Iraq and the Future of the Dollar." Mr. Clark does an excellent job in explaining this issue for the average reader to understand.] After the war, Iraq’s oil transactions were priced using the U.S. dollar.

The currency back story provides powerful context for the current actions of the U.S. against Iran.

Post Script:
The use of military force to defend dollar supremacy is not a sufficient reason for the terrible misery, injury, and death of war. I read Clark’s book and was deeply shocked as this currency topic was not discussed while I was in school (including college).

Related Links

The Real Reasons for the Upcoming War With Iraq

The Real Reasons Why Iran is the Next Target

Oil Producers Shun Dollar

From Petrodollars to Petroeuros: Are the Dollar’s Days as an International Reserve Currency Drawing to an End?

Iran turns from dollar to euro in oil sales