Coming Soon To A Location Near You: $10 A Gallon Gas

This little snippet from Time magazine courtesy of Talking Points Memo doesn't make me very confident in the upcoming months. From TPM:

The first message was routine enough: A "Prepare to Deploy" order sent through naval communications channels to a submarine, an Aegis-class cruiser, two minesweepers and two mine hunters. The orders didn't actually command the ships out of port; they just said to be ready to move by Oct. 1. But inside the Navy those messages generated more buzz than usual last week when a second request, from the Chief of Naval Operations (CNO), asked for fresh eyes on long-standing U.S. plans to blockade two Iranian oil ports on the Persian Gulf. The CNO had asked for a rundown on how a blockade of those strategic targets might work. When he didn't like the analysis he received, he ordered his troops to work the lash up once again.

What's going on? The two orders offered tantalizing clues. There are only a few places in the world where minesweepers top the list of U.S. naval requirements. And every sailor, petroleum engineer and hedge-fund manager knows the name of the most important: the Strait of Hormuz, the 20-mile-wide bottleneck in the Persian Gulf through which roughly 40% of the world's oil needs to pass each day. Coupled with the CNO's request for a blockade review, a deployment of minesweepers to the west coast of Iran would seem to suggest that a much discussed—but until now largely theoretical—prospect has become real: that the U.S. may be preparing for war with Iran.

While the Strait of Hormuz does bottleneck down to actually 21 miles, the important thing to remember is that it only contains two shipping lanes that are about a mile wide each and it is very unlikely we would be able to keep it open. In case you have forgotten, earlier this year Iran tested a new torpedo which can be launched from the land and if they want to close the strait they will.

Also, since the article mentions that we would blockade Iran's oil distribution, you are talking about taking 45% of the world's oil off the market. If Hugo Chavez decides he won't sell oil to the US as a show of support to Iran, that figure could be pushed as high as 47%. The bottom line is that this would wreck the world's economy, not to mention leave us with even fewer friends in the world than we currently have, which isn't many.

Hopefully, this is just saber rattling by the administration, but never underestimate their ability to do stupid things.