Pushing Iran to the brink

The decision to impose a European Union oil embargo on Iran, agreed on Monday, by European foreign ministers, sets a potential bomb ticking, timed to detonate on July 1.On that day, according to the measures on the table in Brussels, Europe will stop importing oil from Iran, about a fifth of the country’s total exports. At about the same time, U.S. sanctions targeted at the global financing of Iran’s oil trade will kick in. Iran could still export some oil to Asia, but at big discounts.Unlike previous sanctions on Iran, the oil embargo would hit almost all citizens and represent a threat to the regime. Tehran has long said such actions would represent a declaration of war, and there are legal experts in the West who agree.The threat of an immediate clash appeared to recede over the weekend when the USS Lincoln aircraft carrier and its task force, including the British frigate HMS Argyll, travelled through the Strait of Hormuz without incident. This was despite warnings from the Iranian Islamic Revolutionary Guard Corps (IRGC) that it would oppose the return of a U.S. carrier to the region.But tensions are almost certain to build again as the effective date of the oil sanctions approaches. The U.S. has already begun beefing up its military presence in the region, and the IRGC is planning naval war games next month.The Strait of Hormuz is the kink in the hose of the Gulf’s oil supply to the world. A small amount of pressure can have a disproportionate effect, sending crude prices soaring and starving the world’s oil-dependent economies.At its narrowest point, the strait is 20 miles wide, but the channels down which more than a third of the world’s ocean-borne oil flows ??? 17m barrels ??? are just two miles wide in parts.An Iranian official raising the prospect of closing the strait in retaliation for the threat of sanctions was enough for the world price of crude to rise to $115 a barrel. Maintained over the long term, that is costly enough to strangle any hint of a