Iran Needs Scary Headlines

If you are into the politics of the US election, you may want to take a few hours to update your position on Iran, because if this trend continues, it will be the next dominate issue in the campaigns. It really has nothing to do with the United States, rather the conditions are setting themselves up for major turmoil in Iran. If your strategic forecast isn't predicting a major incident to steal headlines, you need a new strategic forecaster.

As the price of oil drops, the pursuit of nuclear power doesn't justify the economic costs to the autocratic driven economy in Iran. The loss of government revenue due to lower oil prices comes at the same time the UN is discussing the next round of sanctions. It also comes at the same time that Iran's biggest supporter Russia suffers a stock market crash, which is noteworthy because the Micex is where a lot of Iranian autocrats go with their investments.

So what will Iran do? Raise the price of oil, and they have a time tested strategy for doing exactly that.

Iran announced Tuesday that it has put the elite Revolutionary Guards in charge of defending the country's territorial Persian Gulf waters in what appeared to be a hardening of its stance in the vital oil route.

U.S. commanders in the Gulf have in the past said they find Guards ships more confrontational than the regular Iranian navy, which until the new order was responsible for Iranian defenses in the Gulf.

Iran has warned repeatedly that it will close the narrow Hormuz Strait at the mouth of the Gulf if the United States or Israel attacks it amid tensions over Iran's nuclear program. Around 40 percent of the world's oil passes through Hormuz. Last winter, Iranian and U.S. ships patrolling the Gulf had a several small confrontations in Hormuz that the Americans blamed on provocations by Guards ships.

The October surprise idea is reserved for the folks who think Iran will sit idle and watch their economy struggle under falling oil prices. Clearly, there is an incident in the near future, Iran needs the headlines, Iran needs the markets to fear for a war, and Iran needs the price of oil to go up.

There are a lot of interesting rumors going around, there are rumors of activities off the Iranian coast regarding mine laying exercises, and there are rumors that Iranians attempting to skate sanctions already imposed are having trouble getting access to UAE, traditionally the place for Iranians to step around sanctions. Conditions are pointing towards a need for Iran to grab the headlines and get the price of oil to go up, don't be surprised when the IRGC starts harassing ships in the Gulf to do exactly that.