What’s going on in the Middle East? Is all hell about to break loose?

Two major clues came to light over this past weekend. The first was the unusual secret meeting of CIA Director Leon Panetta last Thursday (Jan. 28) with Egyptian President Hosni Mubarak and later Israeli Prime Minister Benjamin Netanyahu. The second was an administration leak to the press that we are beefing up missile defenses in the Gulf.

After months of Iran’s stalling, nuclear negotiations have gone nowhere. It was obvious from the start they would go nowhere. The self imposed deadline we made to keep Israel from unilaterally striking Iran came and went at the end of the year.

Someone now has to step to the plate, either the US or Israel. Likely it will be us. And the next move along with our allies (UK, the Gulf States and possibly France) will probably be to declare an embargo/blockade on gasoline and refined products into Iran. This job is made simpler because virtually all gasoline imported from outside the Gulf, funnels through a single port/pipeline terminal, Bandar Abbas, located just outside of the Strait of Hormuz.

Iran, despite having gobs of oil, has very little refining capacity – a critical mistake by the ruling mullahs. Most of the imported gasoline comes from a transshipment port in the Emirates, Fujairah, a short 120 mile run to Bandar Abbas. This source will of course dry up, as the Emirates will be on board with us.

To handle the inevitable blockade runners, we must either intercept them or take the lower risk approach and mine the port. Mining is relatively simple to accomplish and most likely would be done with carrier aircraft operating from the Gulf of Oman. Mining has the advantage that you don’t have to actively sink a blockade runner. With mines, nothing goes bang unless the offending ship decides to challenge the minefield. The onus is on the ship owner and its captain. Unless a country has an effective mine sweeping capability, and the Iranians don’t, the port stays closed as happened to Haiphong in 1972.

Most air delivered mines are inexpensive “dumb” bombs with pressure, acoustic or magnetic “triggers.” They can be easily and quickly replenished as needed. There are even more sophisticated mines that are battery powered torpedoes that lay in wait and become active when it hears a ship approaching several miles away. The stand-off distance makes sweeping very difficult. What happens after we declare the embargo/blockade? Well, that’s when all hell breaks loose.

For starters Iran must make a choice whether or not to close the Straits of Hormuz. For them, the positive is they will cut off the 17 million barrels a day that keeps industry in the West humming. The negative is they will cut off all of their own oil exports. Likely they will mine the Straits anyway. The Middle East just works that way.

In Israel you will probably see Iran’s surrogates Hezbollah in Lebanon as well as Hamas in Gaza try and make as much trouble as they can. The meeting of Panetta and Mubarak was to coordinate the isolation of Gaza and to share intelligence on smuggling efforts to resupply Hamas. Egypt recently built a fence on its side of the Gaza border which now means longer tunnels and more digging for the smugglers. In the North expect the same rocket attacks from Hezbollah in Lebanon you saw in 2006.

This time Israel will have a plan in place and retaliation will be in seconds rather than in minutes. In the US we will see oil shortages and likely some form of rationing, probably similar to what we saw in 1973-4. Maybe worse. And you wondered why Obama reversed course and called for more drilling in the State of the Union address. Now you know.