Iran conducts naval exercise in Gulf


The Iranian Islamic Revolutionary Guard is preparing to hold within the next two days a large-scale naval exercise in the Strait of Hormuz, a crucial shipping lane for oil used worldwide, according to USA officials. "We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in global waterways", the Central Command's spokesman overseeing USA forces in the Middle East also said. "We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in worldwide waterways", Capt. William Urban, chief spokesman for US Central Command, told CNN.

But US officials, speaking to Reuters on condition of anonymity, said Iran's Revolutionary Guards appear to have prepared more than 100 vessels for the exercises. Officials at the Pentagon said they expected the exercise would last only a few hours, although it was unclear Thursday night whether it had ended.

Iran normally conducts its annual "swarm" exercise in the fall, but officials said the event has been moved up likely due to recent threats made between President Donald Trump and Iranian President Hassan Rouhani in recent days.

In June, Trump threatened sanctions on countries that purchase oil from Iran, to which Tehran responded by threatening to shut down the Strait of Hormuz.

"In the event Iran choose to militarily close the Strait of Hormuz, the United States and our Arabian Gulf allies would be able to open it in a matter of days", retired Adm. James Stavridis previously told CNBC.

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Iran's Islamic Revolutionary Guard could exercise its ability to block off a major strait amid intensifying tensions with the US.

Iranian authorities have yet to comment on them and several officials contacted by Reuters declined to comment.

Iranian naval activity has steadily increased in recent weeks in the Gulf of Oman and the Red Sea, both of which border war-stricken Yemen, where proxies of Iran, Saudi Arabia and others have engaged in the country's brutal civil war since 2015. Such retaliation could include attacks against United States forces in the Middle East or a blockade of the Strait of Hormuz, a waterway that is a vital energy supply line for much of the world's oil shipments.

"If they want to meet, I'll meet anytime they want, anytime they want".

Bank of America Merrill Lynch sees oil prices hitting $90 a barrel by the second quarter of 2019, as Iranian oil barrels are removed from the market and other supply disruption risks threaten the tightening oil market.