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More than simply disrupting crude shipments, there are fears that escalated Iranian aggression through regional proxies could drag the U.S. into greater military conflict.
"The Red Sea which was secure is no longer secure for the presence of American (military) ... The Quds force and I are your match. We don't go to sleep at night before thinking about you," Major General Qassem Soleimani said in a speech from Hamedan, Iran, according to local media, addressing the American president directly.
"If you begin the war, we will end the war."
The salvo Thursday came in response to Trump's impassioned tweet Sunday warning that Iran would face "consequences the likes of which few throughout history have ever suffered before," which was in turn prompted by a speech by Iranian President Hassan Rouhani threatening that war with Iran would be "the mother of all wars."
Soleimani commands the Quds Force, the elite external branch of Iran's Revolutionary Guard Corps (IRGC), tasked with exporting the ideals of the Islamic Revolution and asserting Iranian influence regionally. The broadside was a rare public appearance for a man who operates largely in secrecy and is considered the most powerful figure in Iran's establishment.
Critically, Soleimani's mention of the Red Sea signaled the regime's willingness to disrupt oil shipments in the Bab el-Mandeb Strait — the world's fourth-largest oil chokepoint — via its proxies there.
Just on Wednesday, Riyadh announced that two Saudi oil carriers were attacked by Houthi missile strikes in the Bab el-Mandeb Strait, which separates Yemen and East Africa and connects the Gulf of Aden to the Red Sea. The kingdom has temporarily suspended all oil shipments through the pass.
"This can be read as a success for Tehran," said Behnam Ben Taleblu, an Iran-focused research fellow at the Foundation for Defense of Democracies in Washington, D.C.
The Houthi strikes, and Soleimani's direct reference to the Bab el-Mandeb on Thursday, "is a signal that Tehran has options for escalation."
Bab el-Mandeb sees about 5 million barrels per day (bpd) of oil, which is small compared to the 17 million that passes through the Strait of Hormuz, on the opposite side of the Arabian Peninsula. Hormuz sits on the peninsula's eastern flank, and is the only sea passage from the Persian Gulf to the open ocean.
But the fear here, said RBC Capital Markets' Helima Croft, head of global commodity strategy, is that increased Houthi rebel attacks on tankers heightens the chance that one will actually be sunk.
In that event, the U.S. "could be forced to become more actively engaged in ensuring maritime security, like during the tanker wars," of the Iran-Iraq war, Croft said, referencing an incident in 1988 where the U.S. came into direct conflict with Iran after Iranian sea mines blew up part of an American missile frigate. The U.S., which supported Saddam Hussein in the Iran-Iraq war, subsequently destroyed roughly half of Iran's naval facilities.
A crisis in the Bab el-Mandeb would trigger greater fears over incidents in Hormuz and send oil prices upward. And while it would be difficult for Iran to close the Straits for a prolonged period, "it could carry off one-off attacks on vessels," she warned.
The escalation comes as the U.S. prepares to reimpose sanctions on Iran as part of its withdrawal from the seven-nation JCPOA (Joint Comprehensive Plan of Action), the deal that allowed economic relief for Iran in exchange for curbs on its nuclear program.
The Trump administration, through use of secondary sanctions, has mandated that all countries wind their imports of Iranian crude down to zero by November 4, in addition to deploying sanctions on a range of other products and financial activities.
"It is no accident that as U.S. sanctions are about to be levied and enforced, Iran is lashing out," Ben Taleblu said.
The regime in Tehran has threatened that if it is unable to trade its oil, other countries will be stopped as well, citing its willingness to close the Strait of Hormuz, through which some 30 percent of the world's oil shipments pass.
While this is unlikely to succeed given the presence of the U.S. Navy's Fifth Fleet in Bahrain, Iran can up its direct harassment of U.S. vessels in the Gulf with IRGC speedboats and drones, activity that had largely stopped since mid-2017, according to Pentagon officials.
And its expected increase in support for regional proxies — which is exactly the behavior the U.S. seeks to deter — will likely incur yet more sanctions.