Tuesday, January 3, 2012

U.S. Spurns Iran’s Demand to Keep Aircraft Carrier Out of Gulf


By Viola Gienger and Heather Langan

(Bloomberg) -- The U.S. rebuffed Iran’s demand not to return an aircraft carrier to the Persian Gulf, a “warning” from Tehran that helped send oil prices to the highest in almost eight months.

The U.S. said it will continue to protect freedom of navigation in the region. The Pentagon doesn’t announce future ship movements and declined to say when the U.S. may send a carrier back to the Gulf following the departure of the USS John C. Stennis last week.

“We usually don’t repeat our warning, and we warn only once,” the head of Iran’s army, Ataollah Salehi, was cited as saying yesterday by the state-run Fars news agency. “We recommend and emphasize to the American carrier not to return to the Persian Gulf.”

He didn’t say what action Iran might take if the U.S. ignores the warning. His statement follows threats from other Iranian officials in recent days to block oil shipping through the Strait of Hormuz in a conflict over new economic sanctions.

While Iran has the military capability to disrupt shipping at least temporarily, it would hurt itself by doing so because it is dependent on the waterway for its oil-export revenues, according to analysts such as Ali Nader of the RAND Corp. research institute. Anthony Cordesman of the Center for Strategic and International Studies in Washington last week called recent threats “an exercise in rhetoric.”

‘Not Seeking Confrontation’

The Stennis, which Iran said it spotted during naval exercises, passed eastward through the Strait of Hormuz on Dec. 27 on a routine voyage and was operating in the northern Arabian Sea, according to the U.S. 5th Fleet, which has a base in Bahrain.

“We are not seeking a confrontation,” State Department spokeswoman Victoria Nuland said yesterday at a briefing in Washington. The U.S. military will continue to play a role in ensuring freedom of navigation, she said.

The U.S. Navy maintains a “constant state of high vigilance” to “ensure the continued, safe flow of maritime traffic in waterways critical to global commerce,” George Little, a spokesman for the Pentagon, said in an e-mailed statement yesterday.

“These are regularly scheduled movements in accordance with our longstanding commitments to the security and stability of the region and in support of ongoing operations,” Little said. “The deployment of U.S. military assets in the Persian Gulf region will continue as it has for decades.”

‘Position of Weakness’

Nuland and White House spokesman Jay Carney asserted Iran is trying to distract Iranians from the nation’s domestic problems. They portrayed Iran as being in a “position of weakness.”

Salehi spoke yesterday at a ceremony to mark the completion of 10 days of maneuvers by the Iranian navy on the east side of the strait in the Gulf of Oman.

Iran doesn’t intend to disrupt shipping in the Strait of Hormuz, Deputy Navy Commander Rear Admiral Mahmoud Mousavi said Jan. 2, according to Press TV.

About 15.5 million barrels of oil a day, or a sixth of global consumption, passes through the Strait of Hormuz between Iran and Oman at the mouth of the Persian Gulf, according to the U.S. Energy Department.

Oil climbed to the highest since May 11 after manufacturing in the U.S. and Asia expanded in December and as concern persisted that further sanctions against Iran may disrupt shipments.

Oil Prices

Crude oil for February delivery rose $4.13, or 4.2 percent, to settle at $102.96 a barrel on the New York Mercantile Exchange. Futures climbed 8.2 percent in 2011, the third consecutive annual increase.

The U.S. Navy said Dec. 28 that it won’t tolerate a disruption to shipping in the strait. The Stennis transited the Strait of Hormuz after a port visit to Jebel Ali in the United Arab Emirates, Navy Commander William Speaks, a Pentagon spokesman, said in an e-mailed response to questions yesterday.

Iran, the world’s third-largest oil exporter, is facing new sanctions on its trade and finances aimed at halting what the U.S. and allies say is a plan to build nuclear weapons. Iran says its atomic program is for peaceful purposes.

Inspectors from the International Atomic Energy Agency are expected to visit Iran soon, the Fars news agency cited Foreign Ministry spokesman Ramin Mehmanparast as saying in Tehran yesterday.

--With assistance from Mark Shenk and Peter S. Green in New York. Editors: Terry Atlas, Larry Liebert

To contact the reporters on this story: Viola Gienger in Washington at vgienger@bloomberg.net; Heather Langan in London at hlangan@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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