In the 1950's, Iran did not have the military might to retaliate to the oil embargo and the naval blockade was aimed at crushing the economy in order to bring about regime change. This economic blockade, should it be allowed to happen, would crush the economy of much of the world.
As it stands, 35% of seaborne oil goes through the Strait of Hormuz 85% of which goes to Asian markets. As the US Energy Information Administration (EIA) has stated: "The blockage of the Strait of Hormuz, even temporarily, could lead to substantial increases in total energy costs." Today, Iran not only has the military might to block the Strait of Hormuz in retaliation, but it also has the legal right.
The 1982 United Nations Convention on the Law of the Sea (UNCLOS) stipulates that vessels can exercise the right of innocent passage, and coastal states should not impede their passage. Under UNCLOS framework of international law, a coastal state can block ships from entering its territorial waters if the passage of the ships harms "peace, good order or security" of said state, as the passage of such ships would no longer be deemed "innocent"[iii] . Saudi Arabia and the UAE export oil through Iran's territorial waters. Should they help America choke Iran's economy, their passage is not deemed 'innocent'.
Even if Iran simply chooses to merely delay the passage of tankers by exercising its right to inspect every hostile oil tanker that passes through the Strait of Hormuz, such inspections and subsequent delays would contribute to higher oil prices.
No doubt, the Iranian navy is no match for the formidable US navy. However, the shallow, narrow waters of Hormuz do not allow for the maneuvering of US battleships. The very presence of warships can lead to incidents. At its narrowest point, the Strait of Hormuz is 21 miles wide -- hardly wide enough for a naval battle to take place and allow the passage of oil tankers at the same time. In recent years (2012), the USS Porter, a US navy destroyer, collided with an oil tanker in the Strait of Hormuz. The collision left a big whole in the navy destroyer.
American officials and oil companies have attempted to assuage the concern of over oil shortages by stating that America is one of the top oil producers. Some fact checking is in order.
According to EIA's latest available data, America's total exports in 2018 (thousands of barrels/month) was 7,730 bbl in April. The same governmental body stated that total imports for the same month was 310,295. According to the EIA: "In 2017, the United States producedabout 15.4 million barrels of petroleum per day (MMb/d), and it consumed about 19.9 MMb/d. Imports from other countries help to supply demand for petroleum." (Click HERE for explanation of imports and exports).
These facts do not stop the spread of such news. As recently as June 4, 2018, Offshore Technology announced America is marching toward being the biggest oil producer. Important factors to bear in mind are that 1. America is the largest oil consumer and continues to have a deficit, and 2. Shale oil production is up thanks to higher oil prices.
While environmentalists objected to shale oil production, oil companies halted the extraction of oil when prices dropped. Anything above $50/bbl makes shale oil production feasible -- which also makes it more expensive of the consumer. Although Mr. Trump and his administration have no regard for the environment, many states and countries have banned shale oil production (see LINK for list as of December 2017).
So the American people (and much of the rest of the world) is left with a stark choice. Either cave in to Mr. Trump's demands, accept loss of business, pay much higher oil prices at the pump and for consumer goods, prepare for a potential war, and sacrifice the environment -- especially water, and mortgage the future of the earth more than we already have, or, don't heed Trump's demands -- even if means a short term loss.
Either way, messing with Iran's oil exports is not an alternative that the world can afford. It may well be that Mr. Trump is beholden to Mr. Netanyahu. He may well feel comfortable enough to subject the American people -- and their allies to financial hardship; but the question is will Americans and the rest of the world sacrifice themselves at the Trump-Netanyahu altar?
[i]Deese, David A. and Joseph S. Nye, ed. Energy and Security. Cambridge: Balllinger Publishing Co.: 1981.
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