Could Iranian Tensions Have An Impact In Corpus Christi?
Managing Editor and Publisher
The Southside Light
Corpus Christi—It’s a threat that Iran has made before but this time the stakes are higher. With the United States placing further economic sanctions against Tehran, the Iranian government is once again saying that they are considering closing the strategic Straits of Hormuz. With Corpus Christi being a major shipping player, what could such a move by Iran mean for the local economy and how would a long term closure impact future oil development plans here in the region?
The main for Texas is production and at current rates, the state is set to produce more oil than Iran itself. To keep pace, Texas has been in a rush to build infrastructure -- including wider and deeper shipping channels to handle foreign demand for the state’s plentiful shale oil. But here lies the problem, US oil refineries require a good, strong demand of heavy crude, which is found abroad. Refiners can only take so much of the lighter blend of oil that comes out of the Permian Basin and Eagle Ford Shale, and that in and of itself could be cause for alarm for the local industry should tensions further escalate.
The Port of Corpus Christi’s trade with the world rose 20.12 percent, from $3.92 billion to $4.7 billion through the first two months of 2019 when compared to this same time one year ago, according to an analysis of recent government data.
Through February Ports top trade partners were The Netherlands, Mexico, South Korea, Canada and Brazil, respectively.
Through the same period of the previous year, the top trade partners were held by Mexico, Venezuela, Canada, Taiwan and China.
The Port’s imports totaled $426.3M for the month of February, making it clear to see why analysts would be at the least somewhat concerned at rising tensions within the Persian Gulf.
But why would the Strait of Hormuz matter all that much and could Tehran really close it? The Strait of Hormuz is the only sea route in and out of the Persian Gulf. Some twenty percent of the world's oil is carried through it by tankers and many of them are bound right here for the Texas Coast.
In a few days, Washington will end all existing waivers granted to eight countries, including China and India, that import Iranian oil and that has Iran grasping at straws for a retaliatory measure—one that could include a blockade.
Major General Mohammed Baqeri of the Iranian Navy said on Monday that certainly if Iranian oil is not allowed to pass through the Strait is Hormuz, no other counties oil would be allowed to pass through either.
The Iranian government, which is unpredictable at best has options including mining the 1.8 mile wide shipping lanes or simply using ships to block them. The regime sees themselves as a key holder of sorts for the straight, but the UAE, Kuwait and Qatar all certainly have an influence in action taken by the Iranian leaders.
Should the Iranian government decide on blockade option, the United States and allied nations have options, as well. The United States 5th fleet, based in Bahrain could offer President Trump a strategic military option to eliminate the threat and ensure that the narrow strip of passage stays open.
Due to Corpus Christi’s position as oil import export community, The Light reached out to both Iranian officials and United States State Department officials on Monday. Both made their points very clear.
A spokesperson with the Department of State said on Monday that all options were in fact on the table and that should the Iranian government make a move to close the strategic strait, action would be taken.
Iranian spokesperson Tariq Mohammed Zitouny said that closing the strait would not be the country’s first option—it would be their second. Zitouny said that a blockade would only be considered if the United States met their goal of zero Iranian oil being exported.
Zitouny offered no assurances.
Though it seems like a long way in the future before any impact is felt here locally, the concern is certainly there and analysts are watching closely. But despite uncertain futures, the panic is controlled both in local and global markets—at least for now.
(Kathleen Herzog is reporting for The Southside Light from Bahrain on a separate local assignment.)