November 11, 2008

06:00 - 07:30


Eugene Gholz and Simon Henderson

November 11, 2008
Energy Security, Iran, and the Persian Gulf

To see the article in the Daily Texan covering the event, please click here.

The Robert S. Strauss Center welcomed Dr. Eugene Gholz, a Strauss Center Senior Fellow and Associate Professor at the LBJ School of Public Affairs, and Simon Henderson, Baker Fellow at the Washington Institute for Near East Policy, on November 11, 2008, for a debate on the economic, political and military dimensions of energy security in the Persian Gulf.

Dr. Gholz opened the debate by stating that policy analysts "get it wrong" when it comes to gauging the military threat Iran poses to oil flows in the region. He admitted that any Iranian attack in the Persian Gulf or the Strait of Hormuz (the narrow chokepoint through which a majority of Gulf oil passes each day) would disrupt the global oil market and raise prices in the short term. However, he argued that the flexibility of the oil market and the ability of tanker companies, oil companies, and insurance companies to adjust makes a long-term disruption of traffic in the Persian Gulf difficult, especially given Iran's limited conventional military power. Furthermore, Dr. Gholz stressed that supertankers are extremely difficult to damage, much less sink, especially when compared to conventional warships. Overall, with "less than the best weapons" aimed at "very difficult targets," he concluded that the true threat to oil is not as bad as the media and policy analysts to think it is.

Mr. Henderson argued that the Iranian threat is "much worse" than Dr. Gholz's optimistic assessment had it. Mr. Henderson agreed that the problem is not the ability of the U.S. Navy's 5th Fleet. It would prevail in any conventional, head-to-head conflict with Iran. He was more concerned with Iran's ability to use "asymmetric" military tactics to cause trouble in the Gulf and the Strait of Hormuz. Fast attack speedboats, naval mines, and cruise missiles could cause problems for tankers. Mr. Henderson offered three ideas to help address the energy security threat. First, the United States and nations such as Saudi Arabia and the United Arab Emirates should continue to build up their military presence in the region and thereby provide a better deterrent to Iranian aggression. Second, Gulf countries should improve the physical security of their oil terminals and pipelines. Third, Saudi Arabia and the other Gulf countries should develop more alternative transport routes so that less oil needs to pass through the Strait of Hormuz.

Dr. James Lindsay, Director of the Strauss Center and moderator for the discussion, asked Dr. Gholz and Mr. Henderson if there were any possible policy options that President-elect Barack Obama might pursue to improve U.S.-Iran relations and thereby reduce the threat to oil supplies. Mr. Henderson argued that simply by being a new president and heading a new administration, Mr. Obama has some "tactical opportunity" to approach diplomacy differently. Dr. Gholz agreed, but cautioned that there is little the United States can do to "trick other countries into doing things not in their interest""”such as abandoning a nuclear weapons program. Both Mr. Henderson and Dr. Gholz agreed that there is little the United States can do to change the fundamental beliefs of the current Iranian leadership.

During the question and answer session, the audience asked about a range of topics related to energy and the Middle East. Responding to the question of whether or not $50 per barrel oil prices gives the United States any diplomatic leverage on Iran, Dr. Gholz stressed that oil prices alone will not do anything to change the Iranian leadership's fundamental disagreement with Western values. When asked whether Iran and the United States have any common interests that diplomats might exploit, Mr. Henderson agreed that some common interests (limiting Al Qaeda's effectiveness, for example) existed, but argued that these shared interests are not on the "core diplomatic agenda" of both nations.

Dr. Eugene Gholz is a Strauss Center Senior Fellow and Associate Professor at the LBJ School of Public Affairs at The University of Texas at Austin, where he is also the graduate advisor for the master's program in global policy studies. He specializes in innovation, defense management, and U.S. foreign military policy. His recent research focuses on energy security, including a year-long project on military threats to oil flows in the Strait of Hormuz (http://hormuz.robertstrausscenter.org).

Simon Henderson is the Baker fellow and director of the Gulf and Energy Program at the Washington Institute for Near East Policy. A former journalist with the Financial Times, he has written extensively on the Persian Gulf, most recently the Washington Institute Policy Focus: "Energy in Danger: Iran, Oil and the West."

Watch the full presentation below: