UPDATE 4-U.S. Fifth Fleet says won't allow Hormuz disruption
* Iran says shutting Strait as easy as drinking glass of water
* Analysts say closure of Gulf will harm Iran's economy
* President Ahmadinejad implies no nuclear compromise (Recasts with comments from U.S. Fifth Fleet)
By Parisa Hafezi and Humeyra Pamuk
TEHRAN/DUBAI, Dec 28 (Reuters) - The U.S. Fifth Fleet said on Wednesday it would not allow any disruption of traffic in the Strait of Hormuz, after Iran threatened to stop ships moving through the world's most important oil route.
"Anyone who threatens to disrupt freedom of navigation in an international strait is clearly outside the community of nations; any disruption will not be tolerated," the Bahrain-based fleet said in an e-mail.
Iran, at loggerheads with the West over its nuclear programme, said on Tuesday it would stop the flow of oil through the Strait of Hormuz in the Gulf if sanctions were imposed on its crude exports.
"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," Iran's navy chief Habibollah Sayyari told Iran's English-language Press TV on Wednesday.
"But right now, we don't need to shut it ...," said Sayyari, who is leading 10 days of exercises in the Strait.
Analysts say that Iran could potentially cause havoc in the Strait of Hormuz, a strip of water separating Oman and Iran, which connects the biggest Gulf oil producers, including Saudi Arabia, with the Gulf of Oman and the Arabian Sea. At its narrowest point, it is 21 miles (34 km) across.
But its navy would be no match for the firepower of the Fifth Fleet which consists of 20-plus ships supported by combat aircraft, with 15,000 people afloat and another 1,000 ashore.
A spokesperson for the Fifth Fleet said in response to queries from Reuters that, it "maintains a robust presence in the region to deter or counter destabilising activities", without providing further details.
A British Foreign Office spokesman called the Iranian threat "rhetoric", saying: "Iranian politicians regularly use this type of rhetoric to distract attention from the real issue, which is the nature of their nuclear programme."
Tension has increased between Iran and the West after EU foreign ministers decided three weeks ago to tighten sanctions on the world's No. 5 crude exporter, but left open the idea of an embargo on Iranian oil.
The West accuses Iran of seeking a nuclear bomb; Tehran says its nuclear programme is for peaceful purposes only.
The Iranian threat pushed up international oil prices on Tuesday although they slipped back on Wednesday in thin trade.
"The threat by Iran to close the Strait of Hormuz supported the oil market yesterday, but the effect is fading today as it will probably be empty threats as they cannot stop the flow for a longer period due to the amount of U.S. hardware in the area," said Thorbjoern bak Jensen, an oil analyst with Global Risk Management.
The Strait of Hormuz is "the world's most important oil chokepoint", according to the U.S. Department of Energy. About 40 percent of all traded oil leaves the Gulf region through the strategic waterway.
The State Department said there was an "element of bluster" in the threat, but underscored that the United States, whose warships patrol in the area, would support the free flow of oil.
France urged Iran on Wednesday to adhere to international law that allows all ships freedom of transit in the Strait.
Iran's international isolation over its defiant nuclear stance is hurting the country's oil-dependent economy, but Iranian officials have shown no sign of willingness to compromise.
Iran dismisses the impact of sanctions, saying trade and other measures imposed since the 1979 Islamic revolution toppled the U.S.-backed shah have made the country stronger.
During a public speech in Iran's western province of Ilam on Wednesday, President Mahmoud Ahmadinejad implied Tehran had no intention of changing course.
"We will not yield to pressure to abandon our rights ... The Iranian nation will not withdraw from its right (to nuclear technology) even one iota because of the pressures," said Ahmadinejad, whose firm nuclear stance has stoked many ordinary Iranians' sense of national dignity.
Some Iranian oil officials have admitted that foreign sanctions were hurting the key energy sector that was in desperate need of foreign investment.
Though four rounds of the U.N. sanctions do not forbid the purchase of Iranian oil, many international oil firms and trading companies have stopped trading with Iran.
"SHOWING THEIR TEETH"
The United States and Israel have not ruled out military action if sanctions fail to rein in Iran's nuclear work.
An Iranian analyst who declined to be named said the leadership could not reach a compromise with the West over its nuclear activities as it "would harm its prestige among its core supporters".
As a result, he said, "Iranian officials are showing their teeth to prevent a military strike".
But he added that closing the Strait of Hormuz would harm Iran's economy, undermining the Iranian leadership ahead of a parliamentary election in March.
The election will be the first litmus test of the clerical establishment's popularity since the 2009 disputed presidential vote, that the opposition says was rigged to secure Ahmadinejad's re-election.
The vote was followed by eight months of anti-government street protests and created a deepening political rift among the hardline rulers.
With the opposition leaders under house arrest since February and the main reformist political parties banned since the vote, Iranian hardline rulers are concerned a low turnout would question the establishment's legitimacy.
Frustration is simmering among lower- and middle-class Iranians over Ahmadinejad's economic policies. Prices of most consumer goods have risen substantially and many Iranians struggle to make ends meet.
(Writing by Parisa Hafezi and Myra MacDonald; Editing by Alison Williams)
- Target says data from 40 million cards stolen in holiday period
- UPDATE 3-Saab wins Brazil jet deal after NSA spying sours Boeing bid
- Special Report: Why Ukraine spurned the EU and embraced Russia
- Facebook, Zuckerberg, banks must face IPO lawsuit: judge
- U.S. prosecutor defends treatment of Indian diplomat |