During his January 12 State of the Union address to Congress, President Barack Obama did not mention the fact that Iran hijacked 10 American sailors and two U.S. Navy vessels in the Persian Gulf just hours before. However, the Obama administration has apologized to the Islamic Republic of Iran. Secretary of State John Kerry contacted his Iranian counterpart, Foreign Minister Javad Zarif, about the incident. General Ali Fadavi of the Iranian Revolutionary Guards condemned the incident and accused the 10 Navy personnel of “unprofessional” acts.
It was Iranian government-controlled media that said the sailors, who included one woman and 9 men, were released into international waters after apologizing. However, no official confirmation of such an apology has come from the U.S. According to a statement from the Revolutionary Guards, the Iranians admitted that the incursion was "unintentional."
Fadavi stated, "We have concluded that passage of Americans in our territorial waters was not a hostile passage or for espionage or similar acts." The Defense Department affirmed that the sailors have been returned safe and sound. An investigation into the incident has started. The Iranians contend that the crew had made navigational errors. "Around the world, the US Navy routinely provides assistance to foreign sailors in distress, and we appreciate the timely way in which this situation was resolved," said Defense Secretary Ash Carter.
According to the Defense Department, the two U.S. Riverine Command Boats were on their way from Kuwait to Bahrain when they encountered mechanical problems. Reportedly, the boats drifted into the nearby territorial waters of Iran and were captured. General Fadavi said of Iran’s response, "Mr Zarif had a firm stance, saying that they were in our territorial waters and should not have been, and saying that they [the US] should apologize." He added, "This has been done and it will not take long, and the naval force, according to its hierarchy, will act immediately upon the orders it receives."
In a statement, the Navy declared:
"Ten U.S. Navy Sailors safely returned to U.S. custody today, after departing Iran. There are no indications that the Sailors were harmed during their brief detention.
"The Sailors departed Farsi Island at 8:43 a.m. (GMT), aboard the two Riverine Command Boats (RCB) that they had been operating when they lost contact with the U.S. Navy. The Sailors were later transferred ashore by U.S. Navy aircraft, while other Sailors took charge of the RCBs and continued transiting toward Bahrain, the boats' original destination.
"The Navy will investigate the circumstances that led to the Sailors' presence in Iran."
The incident came at a delicate moment in relations between the U.S. and Iran since the lifting of sanctions against the Islamist regime is due to commence at the end of this week. According to the BBC, “There are many conservatives and hardliners in both countries who would dearly love to sabotage the deal and consequently both governments may be eager - whatever the attendant rhetoric - to get this episode resolved as quickly as possible. How it plays out will be an important signal as to the balance of power in Tehran itself.”
The economic benefits for the Iranian government are significant, since President Obama may soon release some $30 billion in frozen Iranian funds.
What’s the deal with Iran?
Opponents of the deal struck between the U.S. and allies with Iran over the Iranians nuclear weaponization program expressed outrage over the incident. Sen. Marco Rubio, a Republican presidential candidate, said "Iran is testing the boundaries of this administration's resolve," while fellow Republican Jeb Bush also called on the Obama administration to act swiftly.
In 2015, Iran signed on to a deal with the U.S. and five other world powers to limit its nuclear activities for more than 10 years. In return, the Islamic Republic will benefit from a lifting of sanctions that have affected its economy. Among the sanctions has been the freezing of Iranian assets in the West. Iran has consistently insisted that its nuclear program is for peaceful purposes, but has not allowed independent inspections.
The sanctions imposed on Iran by the U.S., European Union and the United Nations will not be lifted until the International Atomic Energy Agency can certify that Iran has fulfilled its commitments. The date of the so-called ‘implementation day’, when sanctions are to be lifted, has not been set. Be that as it may, Secretary of State Kerry said last week “We are days away from implementation.”
Lifting the sanctions will mean that Iran will be able to access $100 billion in frozen overseas assets. Those sanctions have been debilitating for Iran. They have cost the Islamic Republic at least $160 billion since 2012 alone. Upon the lifting of the sanctions, Iran will be enabled to sell oil on international markets and use the international banking system for trade. In Iran are located the fourth largest oil reserves in the world. The arrival of Iranian petroleum in the world energy pipeline may cause a drop in the world price, which are currently low. In the U.S., the average retail price for gasoline is hovering at around $2.50 per gallon, but in some areas (such as Michigan) gas was selling at $1.98 per gallon.
According to the U.S. Energy Information Agency, there is still considerable uncertainty in the crude oil price outlook. They are expected to remain low as supply continues to outstrip demand this year. More crude is being put into storage. The EIA estimate that global oil inventories increased by 1.9 million b/d in 2015, making it the second consecutive year of surplus. On January 11, wholesale prices dropped to $31.42 per barrel: a fall of $5.40 in one day.
According to the EIA, “The Short-Term Energy Outlook (STEO) released on January 12, which is the first STEO to include projections for 2017, forecasts Brent crude oil prices will average $40 per barrel (b) in 2016 and $50/b in 2017. West Texas Intermediate (WTI) crude oil prices are expected to be $2/b lower than Brent in 2016 and $3/b lower than Brent in 2017.”
Update: an official U.S. Navy photograph taken in October 2015 of one of its Riverine Command Boats identified it as one of its vessels operating in the "Arabian Gulf." The use of the term is disputed, since the body of water separating the Arabian peninsula from Iran and the rest of the Asian mainland has been traditionally called the "Persian Gulf." Here follows the official U.S. Navy description of the above photograph:
151026-N-CJ186-098 ARABIAN GULF (Oct. 26 2015) Riverine Command Boat (RCB) 802, assigned to Combined Task Group (CTG) 56.7, conducts patrol operations in the Arabian Gulf. RCBs were originally used in shallow-water and tropic environments, now joining operation in the U.S. 5th Fleet area of responsibility, these boats have been repurposed for open-sea patrol. CTG 56.7 conducts maritime security operations to ensure freedom of movement for strategic shipping and Naval vessels operating in the inshore and coastal areas in the 5th Fleet area of responsibility. (U.S. Navy photo by Mass Communication Specialist 2nd Class Torrey W. Lee/Released)