As iran's ten days of muscle-flexing naval exercises in the Gulf drew to a close on January 2nd, the price of Brent crude rose by 4% to $112.13, the highest since midNovember. The increase reflected nerves over the bellicose tone of Iran's pronouncements that accompanied its show of strength, amid fears that tension with America was becoming dangerous. On December 28th Admiral Habibollah Sayyari, the commander of Iran's navy, boasted that closing the Strait of Hormuz, through which tankers carry a fifth of all oil traded worldwide (nearly 17m barrels a day), would "be easier than drinking a glass of water". This was swiftly followed by a warning from Washington that any attempt to close the 35-mile-wide strait would "not be tolerated". A few days later, Iran's army chief, General Ataollah Salehi, raised the temperature another notch. After an American aircraft-carrier, the USS John C Stennis from the Bahrain-based Fifth Fleet, passed through the strait, General Salehi said: "Iran will not repeat its warning., .the enemy's carrier has been moved to the Sea of Oman because of our drill. I recommend and emphasise to the American carrier not to return to the Persian Gulf... we are not in the habit of warning more than once."
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