Iran issues new threat on Strait of Hormuz

As battle of words continues, US says Iranians are 'bluffing from a position of weakness'.

The US said Iran, which conducted 10 days of naval war games, is bluffing from a position of weakness after the Islamic Republic issued new threats to close the Strait of Hormuz.

Iran's defence minister and a senior parliamentarian issued new threats over the Strait of Hormuz yesterday as Tehran reinforced its warning to the US against keeping a navy presence in the Gulf.

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The Islamic republic has tested new missiles in 10 days of navy war games, boasted of breakthroughs in nuclear technology and threatened to close the strait, passageway for a third of the world's tanker-borne oil exports, in retaliation for western sanctions over its nuclear programme.

The battle of words and manoeuvring in the Gulf between Iranian and US navy forces has convulsed world oil markets. Prices soared on Tuesday on the back of Iranian threats before falling back to just under $103 a barrel in New York yesterday.

"Iran will do anything to preserve the security of the Strait of Hormuz," Iran's defence minister Ahmad Vahidi said. The presence of foreign forces in the Gulf "has no result but turbulence".

Mr Vahidi's comments reinforced those of Iran's armed forces chief, who warned on Tuesday that the American aircraft carrier John C Stennis, which left the Gulf through the Strait of Hormuz last week, should not return.

"We warn this ship, which is considered a threat to us, not to come back, and we do not repeat our words twice," Gen Ataollah Salehi said.

Washington shrugged off the threat as a bluff and said it reflected Iran's weakness as it struggles under sanctions targeting its vital oil exports.

The US said it would continue to deploy its navy in the Gulf "as it has for decades". France and Britain also have warships in the region.

Iranian media trumpeted yesterday that Iran's military muscle-flexing had exposed the US as a "paper tiger".

And a senior parliamentarian, Aladdin Borujderdi, said that if Iran's oil exports were sanctioned "then no one will have the right to export oil through the Strait of Hormuz".

The new threats came as the European Union prepared to ban imports of Iranian crude oil after similarly tough new sanctions by the US aimed at curbing Tehran's nuclear ambitions. "The principle of an oil embargo is agreed," a European diplomat said. A decision putting it in place could be taken at an EU foreign ministers' meeting on January 30 in Lisbon, the French foreign minister Alain Juppe said.

Meanwhile Turkey's foreign minister arrived in Tehran yesterday for talks on Iran's nuclear programme, on what Ankara portrayed as a routine two-day visit. Turkish officials said Ahmet Davutoglu would also discuss developments in Syria, where Tehran and Ankara have taken opposite sides on the uprising, and in Iraq, where the two regional powers are competing for influence.

Mr Davutoglu is likely to repeat assurances he made on Turkish state television last week that Ankara would "never be in favour or part of any foreign intervention against Iran".

If the visit reduces tensions between Iran and the West, it would significantly boost Turkey's stature. But if Mr Davutoglu is seen to offer Iran support without securing any concessions, Turkey will anger the US and the European Union, analysts said.

Turkey and Iran enjoy beneficial trade ties, despite recent friction in their relationship. Iran supplies 30 per cent of Turkey's oil and gas and Ankara is expected to seek a waiver from the US to exempt Tupras, Turkey's biggest crude oil importer, from new US sanctions on institutions that deal with Iran's Central Bank.

Turkey, a US ally, is bound by UN sanctions, but insists it is not obliged to follow unilateral sanctions imposed by western powers.

Turkey has previously attempted to broker a deal between Iran and the West over Tehran's nuclear programme. Ankara hosted the last talks between the Islamic republic and six world powers that ended in failure in January last year.

Iran in recent days has proposed resuming those negotiations, a gesture that analysts saw as evidence sanctions were taking a serious bite. But Tehran's outreach could also include preconditions such as easing sanctions, which would likely meet strong resistance in Washington and European capitals.

The US on Saturday imposed its toughest yet sanctions on Tehran, enabling Washington to blacklist any foreign entity that deals with Iran's central bank, the main conduit for most Iranian oil contracts.

The Iranian rial has since nosedived to record lows, although Tehran insists this has nothing to do with the new US sanctions. But Iran is clearly nervous. Its Central Bank intervened yesterday to prop up the currency, which was trading at 14,000 rials to the US dollar compared to 18,000 rials on Tuesday. Last month the dollar was trading at about 10,500 rials.

Iran and Turkey have mutually beneficial relations that neither will want to see fray beyond repair. But ties are strained between the region's two major non-Arab Muslim states.

Strong Turkish pressure on Bashar Al Assad's regime in Syria, Iran's main ally in the Arab world, has angered Tehran. The Islamic republic is also dismayed that Turkey is promoting its successful brand of secular Muslim democracy as a template for a changing Arab world.

But it was Ankara's decision last autumn to deploy a Nato missile early-warning system in southern-eastern Turkey that has most infuriated Iran. Tehran maintains this is a US ploy to protect Israel from any counter-attack should the Israel target Iran's nuclear facilities.

An Iranian official suggested last month that Iran could take military action against the radar installation if the country is attacked. That threat infuriated Turkey. Mr Davutoglu promptly called his Iranian counterpart, Ali Akbar Salehi, to protest and was assured that threats of military confrontation were not part of Iran's official policy.