Mehdi Hasan: Are we heading for an "accidental" war with Iran?

The Islamic Republic's vow to close the Strait of Hormuz, in response to sanctions, could give an excuse for action.

US warns Iran over threat to block oil route

screams the headline on the BBC website. According to the report:

The US Navy has said it will not tolerate disruption to a vital oil-trade route, following an Iranian threat to close it.

Iran warned it would shut the Strait of Hormuz if the West imposed more sanctions over its nuclear programme.

The BBC report quotes US Fifth Fleet spokeswoman Rebecca Rebarich as saying that the US navy would be ready to act if required:

The US navy is a flexible, multi-capable force committed to regional security and stability, always ready to counter malevolent actions to ensure freedom of navigation.

Reading the BBC headline and the hawkish quote from Rebarich, I couldn't help but think of a recent piece I read on the Huffington Post website, headlined:

The Coming Accidental War with Iran

The author of the piece, Lyric Hughes Hale, argues that

. . . due to the lack of understanding between our government and Iranian leaders who have been isolated from the rest of the world, war will not be a decision, but a mistake.

She quotes from a recent comment piece in the Los Angeles Times by Trita Parsi, head of a Washington think tank focused on Iran and author of the upcoming book, A Single Roll of the Dice: Obama's Diplomacy With Iran, who wrote:

In Iran, political cannibalism within the Iranian elite has reached new heights. While this has not necessarily given birth to a new Iranian adventurism (beyond the harsh rhetoric), it has paralyzed the state and weakened its ability to maneuver in a changing strategic environment. This is particularly the case when it comes to crucial issues such as its relations with the United States.

. . . The U.S. military leadership is rightfully worried about this situation. The chairman of the Joint Chiefs of Staff, Adm. Michael G. Mullen, has repeatedly raised the lack of communication between the United States and Iran as a major concern in the last few weeks.

"We are not talking to Iran so we don't understand each other," Mullen said last month. "If something happens ... it's virtually assured that we won't get it right." The lack of communication has planted seeds for miscalculation, Mullen argued. And miscalculations often lead to dangerous escalations.

Mullen's diagnosis is on target, as evidenced by the escalation in Iranian bluster. Talking to the Iranians is not guaranteed to resolve the fundamental issues that have created this dangerous atmosphere. But it might ensure that in the midst of the barking, there isn't an accidental bite.

So, will the accidental bite be the closing of the Strait of Hormuz? As the report on the BBC website notes:

The Strait of Hormuz links the Gulf - and the oil-producing states of Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates (UAE) - to the Indian Ocean. About 40% of the world's tanker-borne oil passes through it.

In recent months, plenty of analysts have warned that an American and/or Israeli attack on Iran's nuclear facilities would prompt the closing of the Strait of Hormuz - which is only 20 miles wide - and send oil prices through the roof. Few seem to have anticipated the reverse: that is, a pre-emptive closing of the Strait of Hormuz by the Iranians - annoyed by the new set of sanctions imposed on them by the west - which then offers hawks in Tel Aviv, Washington and, let's be under no illusions, London a casus belli for military action against the self-styled Islamic Republic.

But, if one of the arguments offered against war with Iran has always centred on the danger to the global economy of the Iranian regime cutting off not just its own oil exports (which, at around 3.5 million barrels produced per day, amounts to 2.5 percent of the world's oil supply) but the rest of the region's too, via the afore-mentioned blockade of the Strait of Hormuz, why hasn't it had much traction? Why do so many seemingly well-informed western pundits seem so relaxed about the catastrophic economic consequences of a war with Iran?

"I think the market has paid too little attention to the possibility of an attack on Iran. It's still an unlikely event, but more likely than oil traders have been expecting," remarked Bob McNally, head of the consultancy Rapidan Group and a former energy adviser to the White House, in November. McNally added that he believed oil prices could surge as high as $175 a barrel if the Strait of Hormuz is closed by the Iranians.

Meanwhile, according to the most benign of four scenarios presented in a recent paper by Greg Sharenow, a portfolio manager at bond house PIMCO and a former Goldman Sachs oil trader, oil prices would likely spike to at around $140 a barrel if Iran were to be attacked next year.

Noting the possibility of an Iranian blockade of the Strait of Hormuz, Sharenow calls this "the Armageddon scenario" in which "oil prices could soar, significantly constraining global growth. Forecasting prices in the prior scenarios is dangerous enough. So, we won't even begin to forecast a cap or target price in this final Doomsday scenario."

Accidental wars. Armageddon. Doomsday. Bring on 2012, eh?

As we note on the cover of this week's New Year's issue of the New Statesman:

And you thought 2011 was bad. . .

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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The Brexit Beartraps, #2: Could dropping out of the open skies agreement cancel your holiday?

Flying to Europe is about to get a lot more difficult.

So what is it this time, eh? Brexit is going to wipe out every banana planet on the entire planet? Brexit will get the Last Night of the Proms cancelled? Brexit will bring about World War Three?

To be honest, I think we’re pretty well covered already on that last score, but no, this week it’s nothing so terrifying. It’s just that Brexit might get your holiday cancelled.

What are you blithering about now?

Well, only if you want to holiday in Europe, I suppose. If you’re going to Blackpool you’ll be fine. Or Pakistan, according to some people...

You’re making this up.

I’m honestly not, though we can’t entirely rule out the possibility somebody is. Last month Michael O’Leary, the Ryanair boss who attracts headlines the way certain other things attract flies, warned that, “There is a real prospect... that there are going to be no flights between the UK and Europe for a period of weeks, months beyond March 2019... We will be cancelling people’s holidays for summer of 2019.”

He’s just trying to block Brexit, the bloody saboteur.

Well, yes, he’s been quite explicit about that, and says we should just ignore the referendum result. Honestly, he’s so Remainiac he makes me look like Dan Hannan.

But he’s not wrong that there are issues: please fasten your seatbelt, and brace yourself for some turbulence.

Not so long ago, aviation was a very national sort of a business: many of the big airports were owned by nation states, and the airline industry was dominated by the state-backed national flag carriers (British Airways, Air France and so on). Since governments set airline regulations too, that meant those airlines were given all sorts of competitive advantages in their own country, and pretty much everyone faced barriers to entry in others. 

The EU changed all that. Since 1994, the European Single Aviation Market (ESAM) has allowed free movement of people and cargo; established common rules over safety, security, the environment and so on; and ensured fair competition between European airlines. It also means that an AOC – an Air Operator Certificate, the bit of paper an airline needs to fly – from any European country would be enough to operate in all of them. 

Do we really need all these acronyms?

No, alas, we need more of them. There’s also ECAA, the European Common Aviation Area – that’s the area ESAM covers; basically, ESAM is the aviation bit of the single market, and ECAA the aviation bit of the European Economic Area, or EEA. Then there’s ESAA, the European Aviation Safety Agency, which regulates, well, you can probably guess what it regulates to be honest.

All this may sound a bit dry-

It is.

-it is a bit dry, yes. But it’s also the thing that made it much easier to travel around Europe. It made the European aviation industry much more competitive, which is where the whole cheap flights thing came from.

In a speech last December, Andrew Haines, the boss of Britain’s Civil Aviation Authority said that, since 2000, the number of destinations served from UK airports has doubled; since 1993, fares have dropped by a third. Which is brilliant.

Brexit, though, means we’re probably going to have to pull out of these arrangements.

Stop talking Britain down.

Don’t tell me, tell Brexit secretary David Davis. To monitor and enforce all these international agreements, you need an international court system. That’s the European Court of Justice, which ministers have repeatedly made clear that we’re leaving.

So: last March, when Davis was asked by a select committee whether the open skies system would persist, he replied: “One would presume that would not apply to us” – although he promised he’d fight for a successor, which is very reassuring. 

We can always holiday elsewhere. 

Perhaps you can – O’Leary also claimed (I’m still not making this up) that a senior Brexit minister had told him that lost European airline traffic could be made up for through a bilateral agreement with Pakistan. Which seems a bit optimistic to me, but what do I know.

Intercontinental flights are still likely to be more difficult, though. Since 2007, flights between Europe and the US have operated under a separate open skies agreement, and leaving the EU means we’re we’re about to fall out of that, too.  

Surely we’ll just revert to whatever rules there were before.

Apparently not. Airlines for America – a trade body for... well, you can probably guess that, too – has pointed out that, if we do, there are no historic rules to fall back on: there’s no aviation equivalent of the WTO.

The claim that flights are going to just stop is definitely a worst case scenario: in practice, we can probably negotiate a bunch of new agreements. But we’re already negotiating a lot of other things, and we’re on a deadline, so we’re tight for time.

In fact, we’re really tight for time. Airlines for America has also argued that – because so many tickets are sold a year or more in advance – airlines really need a new deal in place by March 2018, if they’re to have faith they can keep flying. So it’s asking for aviation to be prioritised in negotiations.

The only problem is, we can’t negotiate anything else until the EU decides we’ve made enough progress on the divorce bill and the rights of EU nationals. And the clock’s ticking.

This is just remoaning. Brexit will set us free.

A little bit, maybe. CAA’s Haines has also said he believes “talk of significant retrenchment is very much over-stated, and Brexit offers potential opportunities in other areas”. Falling out of Europe means falling out of European ownership rules, so itcould bring foreign capital into the UK aviation industry (assuming anyone still wants to invest, of course). It would also mean more flexibility on “slot rules”, by which airports have to hand out landing times, and which are I gather a source of some contention at the moment.

But Haines also pointed out that the UK has been one of the most influential contributors to European aviation regulations: leaving the European system will mean we lose that influence. And let’s not forget that it was European law that gave passengers the right to redress when things go wrong: if you’ve ever had a refund after long delays, you’ve got the EU to thank.

So: the planes may not stop flying. But the UK will have less influence over the future of aviation; passengers might have fewer consumer rights; and while it’s not clear that Brexit will mean vastly fewer flights, it’s hard to see how it will mean more, so between that and the slide in sterling, prices are likely to rise, too.

It’s not that Brexit is inevitably going to mean disaster. It’s just that it’ll take a lot of effort for very little obvious reward. Which is becoming something of a theme.

Still, we’ll be free of those bureaucrats at the ECJ, won’t be?

This’ll be a great comfort when we’re all holidaying in Grimsby.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Brexit. You can find him on Twitter or Facebook.