I've received a couple of emails this morning asking my opinion on the Straits of Hormuz incident involving the US Navy and Iranian Revolutionary Guard patrol boats.
I wasn't there this time, so my opinion is based entirely on my past experience - and as you know, past performance is not a guarantee of future returns, especially with the crazed mob running Iran these days.
I've had the watch several times on the way through that strait, it's a tense process during the best of times. However, the Iranian Navy is fairly professional, and professional sailors from all countries tend to respect each other and tend to behave in a fairly predictable manner with respect for the rules of the sea. However, this incident appears to have involved the Iranian Revolutionary Guard Force, these are not professional sailors or navy men - they are religious zealots who passionately hate America (and pretty much everybody else). Their actions are unpredictable and are often driven by political and religious reasons that are incomprehensible to westerners.
However, rest assured, had it come down to it - the Navy would have blown those boats out of the water without scratching their own paint. And the IRG knows that. Attack us at sea in our own element, and you are going to see some serious shit. It's one thing to attack a warship tied to the pier, or to go after a tanker restricted in it's ability to maneuver - it is something else entirely to engage a fast destroyer task force that is warned, linked, and ready to fight. But I doubt that a fight was the Iranian's intention and I suspect that the basic gist of the Times article, cited above, is in large part correct. The Iranian Government needs to show their own people that they aren't afraid of US Military might and that the Revolutionary Guard is the true power in the region, and they can spin this story however they like within Iran.
On the other hand, this incident has given Wall Street the perfect opportunity to ratchet up oil prices yet again.