WASHINGTON -- Amid an escalating war of words between the United States and Iran over the Strait of Hormuz, U.S. and European officials on Wednesday expressed confidence that there was no imminent threat to the passageway through which some 40 percent of the world's seaborne oil travels daily.
Instead, they said, the latest Iranian threat to close the route reflected Tehran's anger at the U.S. pledge to impose sanctions on its nuclear program that for the first time directly target Iran's oil exports, the source of some 80 percent of its government revenue.
A European Union diplomat said that despite "a history of violating almost any international agreement," expectations were low that Iran would blockade the waterway at the mouth of the Persian Gulf. And while such a blockade could lead to a confrontation with U.S. forces and disrupt the global economy, analysts expressed skepticism that Iran's navy had the capacity to shut down the strait for an extended period.
Amid the tensions, the diplomat said that there was nevertheless a "pretty good prospect" that the 27-member EU, which imports some 25 percent of its petroleum supplies from Iran, will adopt an embargo on Iranian oil purchases next month.
"We are not going to let ourselves be pressured by Iranian rhetoric," said the diplomat, who requested anonymity because of the sensitivity of the issue. He added that Saudi Arabia and other Middle East producers have agreed to make up for the losses caused by an embargo.
While some analysts were skeptical that Saudi Arabia had the capacity to make up for the shortfall, world oil markets weren't badly rattled. In New York, benchmark crude fell slightly by $1.99 to $99.35 a barrel in midday trading. In London, Brent crude fell $2.20 to $107.07 a barrel.
The apparent trigger for the flare-up is defense funding legislation that President Barack Obama is preparing to sign, which contains a provision that would allow the U.S. for the first time to penalize foreign banks that do business with Iran's Central Bank, the main conduit for payments for Iranian oil.
The provision would substantially expand existing U.S. sanctions against Tehran. It is aimed at restricting funds for Iran's nuclear program.
The tensions began Tuesday when Iran's vice president, Mohammad Reza-Rahimi, said that if the West imposed sanctions on Iran's oil exports, "then even one drop of oil cannot flow from the Strait of Hormuz."
Then, on Wednesday, Iran's navy chief, Rear Adm. Habibollah Sayyari, told state-run Press TV that closing the strait "is very easy for Iranian naval forces. Iran has comprehensive control over the strategic waterway."
That prompted a response from the U.S. 5th Fleet, based in the Persian Gulf nation of Bahrain, which said it was prepared to defend the key passageway, through which about 15 million barrels of oil pass daily.