Stanford University expert Siegfried Hecker, shown in September, said a third nuclear test could ultimately enable North Korea to develop a nuclear warhead that could be placed on a missile (AP Photo/Ronald Zak).

A third nuclear test is likely to give North Korea the capacity to build nuclear warheads compact enough to be fitted to a missile, the Yonhap News Agency quoted a U.S. expert as saying on Wednesday (see GSN, Dec. 13).

"If North Korea conducts a third nuclear test, that will be very risky. If another of the North's nuclear tests is successful, I believe that North Korea will succeed in the necessary miniaturization within a few years," said Siegfried Hecker, who last year was given a tour of the Stalinist state's new uranium enrichment plant at the Yongbyon nuclear complex.

The aspiring nuclear power has conducted two tests to date, in 2006 and 2009, and is understood to possess enough processed plutonium to fuel six warheads. Uranium enrichment offers another avenue to generating nuclear-weapon material, though the North says its operations is intended to produce fuel for a light-water reactor.

"It is critical at this point to bring Pyongyang back to the table to stop expanding its nuclear weapons programs," Hecker said to a Seoul audience. "The most urgent step is to stop it from conducting another nuclear test and more missile tests."

Pyongyang in October 2010 unveiled its new Musudan intermediate-range ballistic missile, which can be transported by roads, thus making it more difficult to detect. Hecker said the missile could carry a nuclear payload.

South Korea's intelligence agency has said the North could detonate another nuclear test device, though there are no indications that such an event is being readied.

A more tricky but lower priority issue is finding a way to block the North from manufacturing significant stocks of enrichment centrifuges, Hecker said (Yonhap News Agency, Dec. 14).

Pyongyang's recently claimed advances in building the light-water reactor and enriching uranium to low levels show that diplomatic action is badly needed to halt its nuclear advancement, the Korea Times quoted Hecker as saying.

“The first and most important thing is that it does not get worse. And it got worse in 2011,” Hecker said.  “We (need to) engage to stop the threat escalation.” 

Trust-building steps that the North could take would involve halting proliferation activities and abstaining from building any more nuclear weapons or carrying out further tests, the Stanford University specialist said. These actions could be rewarded with more engagement from the United States over the Stalinist regime's security worries (Kim Young-jin, Korea Times, Dec. 14).

Hecker said it was his opinion that the unfinished atomic reactor is probably being built for nonmilitary activities but that it would take a minimum of 24 months to finish work on the facility, the Korea Herald reported.

“Speaking as a technical person, there is no question they have designs for miniaturized warheads. There are lots of designs that can be looked at on the Internet. Those do not make a miniaturized bomb,” the co-director of Stanford University's Center for International Security and Cooperation said. 

The North Koreans "will probably need more tests, missile flight tests for sure" in order to wield a credible nuclear deterrent, Hecker said (Kim Yoon-mi, Korea Herald, Dec. 14).

Meanwhile, the Obama administration's special representative for North Korean human rights is expected this week to hold talks with Pyongyang's point man for U.S. engagement, Ri Gun,  Agence France-Presse reported.

Special envoy Robert King would meet with Ri in Beijing for discussions about potentially renewing delivery of U.S. food to the impoversished North, a diplomatic insider told Yonhap.

"To my knowledge, special envoy King will hold a meeting with Ri Gun, who is now in Beijing, to discuss the issue of nutrition assistance," the unidentified source said. A successful meeting could lead to a third round of U.S.-North Korean talks on resuming the long-stalled six-nation talks on the North's nuclear program, the source added (Agence France-Presse/Yahoo!News, Dec. 14).

Iran’s war games could force U.S. into aggression, oil prices could hit $500

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Peter Goodspeed, National Post
Thursday, Dec. 22, 2011

Iran’s nuclear push is rapidly turning into a game of chicken with the world’s economy.

Faced with the threat of growing international sanctions and unprecedented economic uncertainty that has seen the value of its currency halved in recent weeks, Iran announced Thursday its navy will stage a 10-day exercise in the Strait of Hormuz, starting Saturday.

The move, which increases the risk of military confrontation with the United States, has the potential to temporarily choke off oil exports from the Middle East, drive up international energy prices and damage the global economy.

Admiral Habibollah Sayyari, head of Iran’s navy, said submarines, destroyers, missile-launching ships and attack boats will occupy a 2,000-kilometre stretch of sea from the Strait of Hormuz, at the mouth of the Persian Gulf, to the Gulf of Aden, near the entrance to the Red Sea.

“Iran’s military and Revolutionary Guards can close the Strait of Hormuz. But such a decision should be made by top establishment leaders,” he said.

This month, Parviz Sarvari, a member of the Iranian parliament’s National Security Committee, said Iran would close the Strait of Hormuz as part of a military exercise.

“If the world wants to make the region insecure, we will make the world insecure,” he said.

 

In November, Iran’s energy minister told Al Jazeera television Tehran could use oil as a political tool in the event of future conflict over its nuclear program.

Dubbed Velayat-90 (Velayat is Persian for supremacy), the war games are designed to display Iran’s naval power in the face of growing international criticism of its nuclear work.

This week, Leon Panetta, the U.S. Defence Secretary, predicted Iran will be able to assemble a nuclear bomb within a year and warned the United States had not ruled out using military force to prevent that from happening.

The day before Iran announced the war games, General Martin Dempsey, chairman of the U.S. Joint Chiefs of Staff, told CNN television the U.S. was determined to prevent Iran from becoming a nuclear power.

“My biggest worry is they will miscalculate our resolve,” he said. “Any miscalculation could mean that we are drawn into conflict and that would be a tragedy for the region and the world.”

Iran said the war games would be held in international waters.

The Strait is a 50-kilometre wide passageway through which about a third of the world’s oil tanker traffic sails. Whoever controls this crucial choke-point virtually controls Middle East oil exports.

“The importance of this waterway to both American military and economic interests is difficult to overstate,” said a report by geopolitical analysts at the global intelligence firm Stratfor.

“Considering Washington’s more general — and fundamental — interest in securing freedom of the seas, the U.S. Navy would almost be forced to respond aggressively to any attempt to close the Strait of Hormuz.”

“Iran has built up a large mix of unconventional forces in the Gulf that can challenge its neighbours in a wide variety of asymmetric wars, including low-level wars of attrition,” said Anthony Cordesman of the Center for Strategic & International Studies in Washington.

This includes nearly 200 missile patrol boats, equipped with sea-skimming anti-ship missiles, which “can be used to harass civil shipping and tankers, and offshore facilities, as well as attack naval vessels,” he said.

“These light naval forces have special importance because of their potential ability to threaten oil and shipping traffic in the Gulf and the Gulf of Oman, raid key offshore facilities and conduct raids on targets on the Gulf Coast.”

But Mr. Cordesman also warned “Iran could not ‘close the Gulf’ for more than a few days to two weeks even if it was willing to sacrifice all of these assets, suffer massive retaliation, and potentially lose many of its own oil facilities and export revenues.”

“It would almost certainly lose far more than it gained from such a ‘war,’ but nations often fail to act as rational bargainers in a crisis, particularly if attacked or if their regimes are threatened,” Mr. Cordesman wrote in a report titled Iran, Oil, and the Strait of Hormuz.

Closing the Strait for just 30 days would send the price of crude racing up to US$300 to $500 a barrel, a level that would trigger global economic instability and cost the U.S. nearly US$75-billion in economic activity.

Iran's Navy Commander Habibulah Sayari announces 10 days of war games will be held in the Strait of Hormuz REUTERS/Hamed Jafarnejad/Fars News

“One bomb on Iran and oil prices could shoot up to $300 or even $500 a barrel,” veteran UPI correspondent Arnaud de Borchgrave wrote recently.

According to a computerized war game carried out by the Heritage Foundation in Washington in 2007, the effects of an Iranian attempt to block Gulf oil shipping may be minimal because the U.S. and its allies would immediately send military and naval forces to protect shipping lanes.

If Iran destroyed oil tankers or impeded the transit of oil and other commerce, it could expect to suffer considerable damage in retaliatory attacks, the study said.

The potential for a naval confrontation comes just as the U.S. and its allies are stepping up pressure to impose even stricter economic sanctions against Iran in an effort to force it to abandon its controversial nuclear program.

This follows the introduction of stronger economic sanctions by the U.S. and Europe after a International Atomic Energy Agency report issued in November increased fears Iran is working to develop atomic bomb capability.

Sanctions appear to be hurting Iran, squeezing its banks and sending the Iranian rial plunging to its lowest level against the U.S. dollar.

Washington recently declared Iranian banks guilty of money laundering, forcing U.S. banks to step up the reporting requirements of any banks they deal with who may be doing business with Iran.

This has made it so difficult for foreign businesses many have decided to stop dealing with the Iranians.

In November, Canada and Britain also decided to sever all ties with the Central Bank of Iran and France began calling for a European Union boycott of Iranian oil.

Last week, Issa Jafari, an Iranian parliamentarian, said, “If oil sanctions are imposed on Iran, we will not allow even a single barrel of oil to be exported to countries hostile to us.”

In the past, Iranian officials have dismissed sanctions as doomed to fail, but this week Akbar Salehi, the Foreign Minister, told the official Islamic Republic New Agency, “We cannot pretend the sanctions are not having an effect.”

Mahmoud Bahmani, governor of the Central Bank of Iran, also said Iran needs to act as if it were “under siege.”

National Post

pgoodspeed@nationalpost.com

Donated money to charity

The Associated Press

Posted: Dec 25, 2011 3:24 PM ET

Last Updated: Dec 25, 2011 3:22 PM ET

Anonymous has previously attacked Visa, MasterCard and PayPal. Reuters

A hacker group known as Anonymous has claimed on Sunday to have stolen a raft of emails and credit card data from U.S.-based security think tank Stratfor, promising it was just the start of a weeklong, Christmas-inspired assault on a long list of targets.

Anonymous boasted of stealing Stratfor's confidential client list and mining it for more than 4,000 credit card numbers, passwords and addresses.

The real threat appeared posed to individual employees of government agencies and private companies, and one alleged hacker said the goal was to use the credit data to pilfer a million dollars and give it away as Christmas donations.

Images posted claimed to show receipts, and victims confirmed to The Associated Press unauthorized credit card transactions linked to their accounts.

"Not as many as you expected? Worry not, fellow pirates and robin hoods. These are just the "A"s," read a message posted online that encouraged readers to download a file of the hacked information.

The flood of leaked data started when a Twitter account tied to Anonymous posted a link to what they said was Stratfor's tightly-guarded, confidential client list. Among those on the list: The U.S. Army, the U.S. Air Force and the Miami Police Department.

The rest of the list, which the hacking movement said was a small slice of its 200 gigabytes worth of plunder, included banks, law enforcement agencies, defense contractors and technology firms such as Apple and Microsoft.

"Not so private and secret anymore?" the group taunted in a message on the microblogging site, warning of more mayhem to come.

Austin, Texas-based Stratfor provides political, economic and military analysis to help clients reduce risk, according to a description on its YouTube page. It charges subscribers for its reports and analysis, delivered through the web, emails and videos.

Lt. Col. John Dorrian, public affairs officer for the Air Force, said that "for obvious reasons" the Air Force doesn't discuss specific vulnerabilities, threats or responses to them.

"The Air Force will continue to monitor the situation and, as always, take apporpriate action as necessary to protect Air Force networks and information," he said in an email.

Miami Police Department spokesman Sgt. Freddie Cruz Jr. said that he could not confirm that the agency was a client of Stratfor, and he said he had not received any information about any security breach involving the police department

Encrypted files displayed online

Anonymous said it was able to get the credit details in part because Stratfor didn't bother encrypting them — an easy-to-avoid blunder which, if true, would be a major embarrassment for any security-related company.

Hours after publishing what it claimed was Stratfor's client list, Anonymous tweeted a link to encrypted files online. It said the files contained 4,000 credit cards, passwords and home addresses belonging to individuals on the think tank's private client list.

It also linked to images online that it suggested were receipts for charitable donations made by the group manipulating the credit card data it stole.

"Thank you! Defense Intelligence Agency," read the text above one image that appeared to show a transaction summary indicating that an agency employee's information was used to donate $250 to a non-profit.

One receipt — to the American Red Cross — had Allen Barr's name on it.

'We had to close the account'

Barr, of Austin, Texas, recently retired from the Texas Department of Banking and said he discovered last Friday that a total of $700 had been spent from his account. Barr, who has spent more than a decade dealing with cybercrime at banks, said five transactions were made in total —all to charities such as CARE and Save the Children.

Barr wasn't aware until a reporter with the AP called him.

"It made me feel terrible. It made my wife feel terrible. We had to close the account."

Stratfor said in an email to members that it had suspended its servers and email after learning that its website had been hacked.

"We have reason to believe that the names of our corporate subscribers have been posted on other web sites," said the email, passed on to The Associated Press by subscribers. "We are diligently investigating the extent to which subscriber information may have been obtained."

The email, signed by Stratfor Chief Executive George Friedman, said the company is "working closely with law enforcement to identify who is behind the breach."

"Stratfor's relationship with its members and, in particular, the confidentiality of their subscriber information, are very important to Stratfor and me," Friedman wrote.

Repeated calls to Stratfor went unanswered Sunday and an answering machine thanked callers for contacting the "No. 1 source for global intelligence." Stratfor's website was down, with a banner saying "site is currently undergoing maintenance."

Wishing everyone a "Merry LulzXMas" — a nod to its spinoff hacking group Lulz Security — Anonymous also posted a link on Twitter to a site containing the email, phone number and credit number of a U.S. Homeland Security employee.

The employee, Cody Sultenfuss, said he had no warning before his details were posted.

"They took money I did not have," he told The Associated Press in a series of emails, which did not specify the amount taken. "I think why me? I am not rich."

Anonymous warned it has "enough targets lined up to extend the fun fun fun of LulzXmas through the entire next week."

The group has previously claimed responsibility for attacks on companies such as Visa, MasterCard and PayPal, as well as others in the music industry and the Church of Scientology

TEHRAN—The U.S. warned Iran Wednesday that it will not tolerate any disruption of naval traffic through the Strait of Hormuz, after Iran's navy chief said the Islamic Republic is capable of closing the vital oil route if the West imposes new sanctions targeting Tehran's oil exports.

Iran's Adm. Habibollah Sayyari told state-run Press TV that closing the strait, which is the only sea outlet for the crucial oil fields in and around the Persian Gulf, “is very easy” for his country's naval forces.

It was the second such warning by Iran in two days, reflecting Tehran's concern that the West is about to impose new sanctions that could hit the country's biggest source of revenue, its oil sector. On Tuesday, Vice-President Mohamed Reza Rahimi threatened to close the strait if the West imposes such sanctions.

In response, the Bahrain-based U.S. 5th Fleet's spokeswoman warned that any disruption at the strait “will not be tolerated.”

The spokeswoman, Lt. Rebecca Rebarich, said the U.S. Navy is “always ready to counter malevolent actions to ensure freedom of navigation.”

With concern growing over a possible drop-off in Iranian oil supplies if sanctions are imposed, a senior Saudi oil official said Gulf Arab nations are ready to offset any loss of Iranian crude.

That reassurance led to a drop in world oil prices. In New York, benchmark crude fell 77 cents to $100.57 a barrel in morning trading. Brent crude fell 82 cents to $108.45 a barrel in London.

Western nations are growing increasingly impatient with Iran over its nuclear program. The U.S. and its allies have accused Iran of using its civilian nuclear program as a cover to develop nuclear weapons. Iran has denied the charges, saying its program is geared toward generating electricity and producing medical radioisotopes to treat cancer patients.

The U.S. Congress has passed a bill banning dealings with the Iran Central Bank, and President Barack Obama has said he will sign it despite his misgivings. Critics warn it could impose hardships on U.S. allies and drive up oil prices.

The bill could impose penalties on foreign firms that do business with Iran's central bank. European and Asian nations import Iranian oil and use its central bank for the transactions.

Iran is the world's fourth-largest oil producer, with an output of about 4 million barrels of oil a day. It relies on oil exports for about 80 per cent of its public revenues.

Iran has adopted an aggressive military posture in recent months in response to increasing threats from the U.S. and Israel that they may take military action to stop Iran's nuclear program.

The navy is in the midst of a 10-day drill in international waters near the strategic oil route. The exercises began Saturday and involve submarines, missile drills, torpedoes and drones. The war games cover a 2,000-kilometre stretch of sea off the Strait of Hormuz, northern parts of the Indian Ocean and into the Gulf of Aden near the entrance to the Red Sea as a show of strength and could bring Iranian ships into proximity with U.S. Navy vessels in the area.

Iranian media are describing how Iran could move to close the strait, saying the country would use a combination of warships, submarines, speed boats, anti-ship cruise missiles, torpedoes, surface-to-sea missiles and drones to stop ships from sailing through the narrow waterway.

Iran's navy claims it has sonar-evading submarines designed for shallow waters of the Persian Gulf, enabling it to hit passing enemy vessels.

A closure of the strait could temporarily cut off some oil supplies and force shippers to take longer, more expensive routes that would drive oil prices higher. It also potentially opens the door for a military confrontation that would further rattle global oil markets.

Iran claimed a victory this month when it captured an American surveillance drone almost intact. It went public with its possession of the RQ-170 Sentinel to trumpet the downing as a feat of Iran's military in a complicated technological and intelligence battle with the U.S.

American officials have said that U.S. intelligence assessments indicate the drone malfunctioned.

Iraq on the brink of ‘devastating civil war’: Former PM Allawi

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Reuters
Wednesday, Dec. 28, 2011

By Jim Loney

BAGHDAD — The head of the Sunni-backed Iraqiya political bloc said Iraq “stands on the brink of disaster” and issued a list of demands on Wednesday in a political crisis triggered by charges against a Sunni leader.

Iraqiya leader Iyad Allawi, in an editorial for The New York Times, said Iraq was heading towards a “sectarian autocracy that carries with it the threat of devastating civil war.”

Sectarian tensions are running high in Iraq ten days after the last U.S. troops pulled out. Shi’ite Prime Minister Nouri al-Maliki has sought the arrest of Sunni Vice President Tareq al-Hashemi, accused of running death squads.

The commentary, co-authored by Iraqiya officials Osama al-Nujaifi, the parliament speaker, and Rafie al-Esawi, the finance minister, said bloc leaders were being “hounded and threatened by Mr. Maliki, who is attempting to drive us out of Iraqi political life and create an authoritarian one-party state.”

The political crisis, Iraq’s worst in a year, threatens Maliki’s fragile year-old coalition government, an alliance of Shi’ite, Sunni and Kurdish political blocs.

Nujaifi and Iraqi President Jalal Talabani, a Kurd, on Tuesday proposed a national conference of political leaders to try to resolve the crisis and said allegations against Hashemi should be left to the courts.

But Allawi, in a separate statement, listed a series of demands before he would agree to any conference, including the release of “all detainees held on false charges” and the formation of a panel of top politicians to oversee and prevent interference in legal procedures.

Iraqiya has criticized a recent arrest campaign against hundreds of former members of Saddam Hussein’s Baath Party over what some officials said was a plot to seize power after U.S. troops left.

Allawi also demanded the government implement an accord reached last year before the coalition government was formed that would have given him leadership of a new national policy council. Allawi has accused Maliki of reneging on the pact.

Allawi said “all options are still open” to resolve the crisis, including early elections and the possibility of a new candidate for prime minister.

Both Iraqiya and the Sadrist movement of anti-American Shi’ite cleric Moqtada al-Sadr have called for new elections, currently not due until 2014.

Iraq’s latest crisis was triggered by the charges against Hashemi and Maliki’s request to parliament to fire Sunni Deputy Prime Minister Saleh al-Mutlaq. Hashemi and Mutlaq are two of the most senior figures in Iraqiya.

In the editorial, Allawi, a former prime minister, said Maliki had “laid siege to our party,” surrounding leaders’ homes and offices in Baghdad’s Green Zone with government forces.

“…as Iraq once again teeters on the brink, we respectfully ask America’s leaders to understand that unconditional support for Mr. Maliki is pushing Iraq down the path to civil war,” the editorial said.

“Unless America acts rapidly to help create a successful unity government, Iraq is doomed.”

U.S. and Iraqi officials have been engaged in a flurry of talks to try ease tensions in a crisis that could have wider impact in the region with Iraq’s Sunni and Shi’ite neighbours.

© Thomson Reuters 2011

Iran to test fire missiles in Strait of Hormuz

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Agence France-Presse
Friday, Dec. 30, 2011

Click to enlarge. National Post Graphics

TEHRAN — Iran, which has been carrying out war games in the Strait of Hormuz over the past week, is to test fire shorter- and longer-range missiles in the key oil waterway on Saturday, the navy said.

“Shorter- and longer-range, ground-to-sea, surface-to-surface and surface-to-air missiles will be tested on Saturday,” the ISNA news agency quoted navy spokesman, Commodore Mahmoud Mousavi, as saying on Friday.

The move is likely to stoke tensions between Tehran and Washington, already running high over a warning by Iran this week that “not a drop of oil” would pass through the strait if Western governments followed through with planned additional sanctions over its nuclear program.

The U.S. State Department said on Thursday that Iran’s threat to close the waterway, through which more than a third of the world’s tanker-borne oil passes, exhibited “irrational behavior” and “will not be tolerated.”

The naval manoeuvres launched by Iran in the strait on December 24 have so far included mine-laying and the use of aerial drones, according to Iranian media.

Analysts and oil market traders have been watching developments in and around the Strait of Hormuz carefully, fearing that the intensifying war of words between arch foes Tehran and Washington could spark open confrontation.

“It’s a cat and mouse game,” said Jonathan Barratt, Sydney-based chief executive of Barratt’s Bulletin, an independent commodity research firm.

“There is still a risk premium that will be brought into the market,” he told AFP.

The United States said Thursday that Iran had exhibited “irrational behaviour” by threatening to close a major oil shipping lane it also needs.

The U.S. and the European Union are considering new sanctions aimed at Iran’s oil and financial sectors. But the EU has been divided over whether to impose an embargo on the country’s crude.

Iran’s Revolutionary Guards rejected a warning that the U.S. military would “not tolerate” such a closure, saying they would act decisively “to protect our vital interests.”

The tough language came as two U.S. warships entered a zone where the Iranian navy’s ships and aircraft were in the middle of 10 days of war games designed as a show of military might.

But a U.S. navy spokeswoman said later that the aircraft carrier USS John C. Stennis and the guided-missile cruiser USS Mobile Bay had transited without incident on Tuesday, in pre-planned, routine operation.

“Our interaction with the regular Iranian Navy continues to be within the standards of maritime practice, well-known, routine and professional,” Fifth Fleet spokeswoman Lieutenant Rebecca Rebarich said on Thursday.

The transit area was in waters east of the Strait of Hormuz, a choke point at the entrance to the Gulf through which more than a third of the world’s tanker-borne oil passes.

Iranian Vice President Mohammad Reza Rahimi warned this week that “not a drop of oil will pass through the Strait of Hormuz” if the West followed through with planned additional sanctions against Iran over its nuclear programme.

The navy commander, Admiral Habibollah Sayari, backed that up by saying it would be “really easy” to close the strait.

An Iranian Army soldier stands guard on a military speed boat during the "Velayat-90" navy exercises in the Strait of Hormuz in southern Iran on December 28, 2011 as Iran started 10 days of naval drills from December 24, covering east of Strait of Hormuz and the Gulf of Oman to the Gulf of Aden. The Strait of Hormuz, which Iran has threatened to block if the West applies sanctions on its oil exports, is a strategically important waterway through which 40 percent of the world's seaborne oil transits ALI MOHAMMADI/AFP/Getty Images

A U.S. Defence Department spokesman riposted Wednesday that “interference with the transit… of vessels through the Strait of Hormuz will not be tolerated.”

But Brigadier General Hossein Salami, the deputy commander of Iran’s powerful Revolutionary Guards, told Fars news agency on Thursday that “our response to threats is threats.”

“We have no doubt about our being able to carry out defensive strategies to protect our vital interests — we will act more decisively than ever,” he was quoted as saying.

“The Americans are not qualified to give us permission” to carry out military strategy, he said.

Admiral Sayari said the U.S. aircraft carrier was monitored by Iranian forces as it passed from the Strait of Hormuz to the Gulf of Oman, state television reported.

It broadcast footage of an aircraft carrier being shadowed by an Iranian plane.

An Iranian navy spokesman, Commodore Mahmoud Mousavi, told the official IRNA news agency the US carrier went “inside the manoeuvre zone” where Iranian ships were conducting their exercises.

He added that the Iranian navy was “prepared, in accordance with international law, to confront offenders who do not respect our security perimeters during the manoeuvres.”

U.S. officials had said on Wednesday that the Stennis and its carrier strike group were moving through the Strait of Hormuz.

The closure could cause havoc on world oil markets, disrupting the fragile global economy, although analysts say the Islamic republic is unlikely to take such drastic steps as it relies on the route for its own oil exports.

The oil market has endured a volatile ride in 2011.

Unrest in the crude-producing Middle East and North Africa region had sparked hefty price gains earlier this year amid the so-called Arab Spring.

London Brent oil surged as high as $127.02 per barrel in April and New York crude hit a two-and-a-half year peak at $114.83 in early May.

Prices soared after popular uprisings toppled the long-standing leaders of Tunisia, Egypt and Yemen, while unrest also rocked other parts of the oil-rich region — especially key crude producer Libya.

Libya was producing about 1.4 million barrels per day of mostly high-value light sweet crude before the uprising at the start of the year. Around 85 percent of Libyan output was exported to Europe, and the break in supply contributed to the surge in Brent prices.

The killing of Libyan leader Muammar Gaddafi in October eased worries that a fully-fledged insurgency that could disrupt oil production for years to come.

The oil market has since buckled under the weight of a stronger dollar, spreading global economic gloom and contagion fears arising from the eurozone sovereign debt crisis.

Traders remain on edge over the eurozone debt drama, amid concern that it could spark another sharp economic downturn and slash global demand for energy and other major raw materials.

Investors are also worried about the prospect of a sharp economic slowdown in China — which is the world’s biggest energy consumer.

Over the last 12 months, Brent prices have gained about 13.7 percent and New York crude has won 9.2% in value.

Pentagon press secretary George Little said this was “a pre-planned, routine transit” to the Arabian Sea to provide air power for the war in Afghanistan.

Iran's Navy Commander Habibulah Sayari: “Closing the Strait of Hormuz for Iran’s armed forces is really easy … or as Iranians say it will be easier than drinking a glass of water.” REUTERS/Hamed Jafarnejad/Fars News

The United States maintains a navy presence in the Gulf in large part to ensure oil traffic there is unhindered. Its Fifth Fleet is based in Bahrain.

Iran, which is already subject to several rounds of sanctions over its nuclear programme, has repeatedly said it could target the Strait of Hormuz if attacked or its economy is strangled.

Such a move could cause havoc on world oil markets, disrupting the fragile global economy, although analysts say the Islamic republic is unlikely to take such drastic steps as it relies on the route for its own oil exports.

Iran’s naval manoeuvres included the laying of mines and the use of aerial drones, according to Iranian media. Missiles and torpedoes were to be test-fired in the coming days.

Earlier this month, Iranian officials said a Revolutionary Guards cyber-warfare unit had hacked the controls of a U.S. bat-winged RQ-170 Sentinel reconnaissance drone and brought it down safely.

Analysts and oil market traders are watching the developing situation in and around the Strait of Hormuz carefully, fearing that a spark could ignite open confrontation between the long-time foes.

The United States had proposed a military hotline between Tehran and Washington to defuse any “miscalculations” between their navies, but Iran in September rejected that offer.

Agence France-Presse

COLOMBO, SRI LANKA—Maldives ordered hundreds of its luxury resorts to close their spas nearly a week after a protest led by opposition parties demanding a halt to “anti-Islamic” activities, the government said Friday.

A statement from the president’s office said “the government has decided to close massage parlours and spas in the Maldives, following an opposition-led religious protest last week calling for their closure.”

An official from the president’s office said the tourism ministry notified the resorts Thursday but hasn’t confirmed if the spas have been closed. He spoke on condition of anonymity as he was not authorized to speak on the matter.

The Indian Ocean archipelago with 1,192 tiny coral islands is known for its exquisite resorts.

Thousands at last week’s protest called on the government to halt what they called “anti-Islamic” activities. Sunni Islam is the official religion in the Maldives and practicing any other faith is forbidden.

Last week’s protest was called by the opposition Adhaalat, or Justice, Party and several other groups that accuse President Mohammed Nasheed’s government of compromising principles of Islam and want strict Islamic law.

The protesters also want authorities to stop the sale of alcohol in the islands, shut down brothels operating in the guise of massage parlours and demolish monuments gifted by other countries marking a South Asian summit last month because they see them as idols.

They also wanted to halt a plan to allow direct flights to Israel.

Though the country does not allow stoning or executions, it is under scrutiny for its absence of religious freedom and for punishments such as public flogging.

Debates on religious issues have emerged since a group vandalized a monument gifted by Pakistan marking a South Asian summit last month with the image of Buddha. Buddhism was part of the present Islamic republic’s history.

An angry protest last month followed a call by U.N. High Commissioner for Human Rights Navi Pillay for the Maldives to end floggings of women being punished for adultery