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An Assessment of the Economic, Military and Strategic Consequences of an Iranian Closure of the Strait of Hormuz 6

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An Assessment of the Economic, Military and Strategic Consequences of an Iranian Closure of the Strait of Hormuz 6 NAVAL POSTGRADUATE SCHOOL MONTEREY, CALIFORNIA THESIS THE IDLE THREAT? AN ASSESSEMENT OF THE ECONOMIC, MILITARY, AND STRATEGIC CONSEQUENCES OF AN IRANIAN CLOSURE OF THE STRAIT OF HORMUZ by Brenna L. Schnars September 2010 Thesis Co-Advisors: Abbas Kadhim Robert Looney Approved for public release; distribution is unlimited THIS PAGE INTENTIONALLY LEFT BLANK REPORT DOCUMENTATION PAGE Form Approved OMB No. 0704-0188 Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188) Washington DC 20503. 1. AGENCY USE ONLY (Leave blank) 2. REPORT DATE 3. REPORT TYPE AND DATES COVERED September 2010 Master’s Thesis 4. TITLE AND SUBTITLE 5. FUNDING NUMBERS The Idle Threat? An Assessment of the Economic, Military and Strategic Consequences of an Iranian Closure of the Strait of Hormuz 6. AUTHOR(S) Brenna L. Schnars 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 8. PERFORMING ORGANIZATION Naval Postgraduate School REPORT NUMBER Monterey, CA 93943-5000 9. SPONSORING /MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSORING/MONITORING N/A AGENCY REPORT NUMBER 11. SUPPLEMENTARY NOTES The views expressed in this thesis are those of the author and do not reflect the official policy or position of the Department of Defense or the U.S. Government. IRB Protocol number: N/A 12a. DISTRIBUTION / AVAILABILITY STATEMENT 12b. DISTRIBUTION CODE Approved for public release; distribution is unlimited 13. ABSTRACT (maximum 200 words) The continual developments in the Iranian nuclear program have caused increased concern not only for the United States but the majority of the international community as well. While several rounds of United Nations sanctions have been placed on Iran, this has not deterred it from continuing its nuclear advancements. The United States has publicly announced that it does not support Iran’s developing nuclear program and will inflict measures to ensure that it discontinues these advances. While these measures have not been clearly defined, Iran has stated that hostile actions taken by the international community, specifically the United States or Israel may result in the closure of the Strait of Hormuz. While Iran has used this threat in the past, primarily in the Iraq-Iran War its full strength has never come to fruition. This thesis aims to determine whether closing the Strait of Hormuz is a viable option as an Iranian retaliation mechanism against increased sanctions from the international community and the United States or a direct attack from either Israel or the United States by analyzing the economic, strategic, and military consequences for Iran, the United States and the Gulf Cooperation Council States. 14. SUBJECT TERMS 15. NUMBER OF Strait of Hormuz, U.S., GCC, and Iranian Military, Persian Gulf Oil Economics PAGES 135 16. PRICE CODE 17. SECURITY 18. SECURITY 19. SECURITY 20. LIMITATION OF CLASSIFICATION OF CLASSIFICATION OF THIS CLASSIFICATION OF ABSTRACT REPORT PAGE ABSTRACT Unclassified Unclassified Unclassified UU NSN 7540-01-280-5500 Standard Form 298 (Rev. 2-89) Prescribed by ANSI Std. 239-18 i THIS PAGE INTENTIONALLY LEFT BLANK ii Approved for public release; distribution is unlimited THE IDLE THREAT? AN ASSESSMENT OF THE ECONOMIC, MILITARY, AND STRATEGIC CONSEQUENCES OF AN IRANIAN CLOSURE OF THE STRAIT OF HORMUZ Brenna L. Schnars Lieutenant, United States Navy B.S., United States Naval Academy, 2003 Submitted in partial fulfillment of the requirements for the degree of MASTER OF ARTS IN SECURITY STUDIES (MIDDLE EAST, SOUTH ASIA, SUB-SAHARAN AFRICA) from the NAVAL POSTGRADUATE SCHOOL September 2010 Author: Brenna L. Schnars Approved by: Abbas Kadhim Thesis Co-Advisor Robert Looney Thesis Co-Advisor Harold A. Trinkunas, PhD Chairman, Department of National Security Affairs iii THIS PAGE INTENTIONALLY LEFT BLANK iv ABSTRACT The continual developments in the Iranian nuclear program have caused increased concern not only for the United States but the majority of the international community as well. While several rounds of United Nations sanctions have been placed on Iran, this has not deterred it from continuing its nuclear advancements. The United States has publicly announced that it does not support Iran’s developing nuclear program and will inflict measures to ensure that it discontinues these advances. While these measures have not been clearly defined, Iran has stated that hostile actions taken by the international community, specifically the United States or Israel, may result in the closure of the Strait of Hormuz. While Iran has used this threat in the past, primarily in the Iraq-Iran War, its full strength has never come to fruition. This thesis aims to determine whether closing the Strait of Hormuz is a viable option as an Iranian retaliation mechanism against increased sanctions from the international community and the United States, or a direct attack from either Israel or the United States, by analyzing the economic, strategic, and military consequences for Iran, the United States and the Gulf Cooperation Council States. v THIS PAGE INTENTIONALLY LEFT BLANK vi TABLE OF CONTENTS I. IRANIAN NUCLEAR PROGRAM ...........................................................................1 A. INTRODUCTION............................................................................................1 B. THE BEGINNING OF IRAN’S NUCLEAR PROGRAM AND THE U.S. RESPONSE ..............................................................................................2 C. IRANIAN ADVANCEMENTS THROUGHOUT THE 1980S AND 1990S AND THE U.S. RESPONSE................................................................2 D. PRESIDENT GEORGE W. BUSH ERA.......................................................4 E. PRESIDENT BARACK OBAMA’S APPROACH.......................................7 F. ISRAEL EQUALS THE UNITED STATES.................................................9 G. CONCLUSION ..............................................................................................10 II. STRAIT OF HORMUZ.............................................................................................11 A. GEOGRAPHICAL STATISTICS AND IMPORTANCE .........................11 B. ECONOMIC INTERESTS ...........................................................................12 1. Iran......................................................................................................12 2. The United States ...............................................................................15 3. GCC States .........................................................................................17 a. Saudi Arabia............................................................................18 b. Bahrain....................................................................................19 c. Kuwait......................................................................................20 d. Qatar........................................................................................21 e. United Arab Emirates .............................................................22 f. Oman .......................................................................................24 III. IRAQ-IRAN WAR.....................................................................................................27 A. INTRODUCTION..........................................................................................27 B. THE IRAQ-IRAN WAR IN SHORT...........................................................28 C. IRANIAN ACTIONS IN THE PERSIAN GULF AND STRAIT OF HORMUZ .......................................................................................................31 1. Direct/Indirect Attacks on Merchant Vessels..................................31 2. United States Actions.........................................................................36 3. Strait of Hormuz ................................................................................38 D. POSSIBLE ALTERNATIVES FOR IRAN.................................................40 E. CONCLUSION ..............................................................................................42 IV. MILITARY ASSETS AND CAPABILITIES OF IRAN, THE UNITED STATES, AND THE GCC STATES........................................................................45 A. INTRODUCTION..........................................................................................45 B. IRANIAN MILITARY CAPABILITIES AND ACTION..........................45 1. Army and the Islamic Revolutionary Guard Corp.........................46 2. Air Force.............................................................................................50 3. Navy.....................................................................................................55 C. UNITED STATES MILITARY CAPABILITIES AND ACTIONS .........60 vii 1. Army....................................................................................................60 2. Air Force.............................................................................................66
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