Iran 'preparing' major military exercise in Gulf as US tensions rise

US officials have witnessed an increase in Iranian activity in the Arabian Gulf

US Navy sailors stand watch on the guided-missile cruiser USS Princeton as it transits the Strait of Hormuz October 22, 2017. Reuters

Iran appears to be preparing a major military exercise in the Gulf in reaction to escalating tensions with the US after it withdrew from a landmark nuclear deal and renewed sanctions on the Islamic republic, according to US officials.

Iran has yet to announce any major exercise through its usual official channels and such exercises usually take place later in the year. But US officials said they have seen an increase in Iranian activity in the Gulf region.

"We are aware of the increase in Iranian naval operations within the Arabian Gulf, Strait of Hormuz and Gulf of Oman," Navy Captain Bill Urban, the chief spokesman at Central Command, which oversees US forces in the Middle East, told Reuters.

"We are monitoring it closely, and will continue to work with our partners to ensure freedom of navigation and free flow of commerce in international waterways," Mr Urban added.

US officials, speaking to Reuters on condition of anonymity, said Iran's Revolutionary Guards has appeared to have prepared more than 100 vessels for exercises. Hundreds of ground forces could also be involved.

They said the drills could begin within the next 48 hours, although the precise timing was unclear.

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US officials said the timing of the drills appeared designed to send a message to Washington, which is intensifying its economic and diplomatic pressure on Tehran but so far stopping short of using the U.S. military to more aggressively counter Iran and its proxies.

Trump's policies are already putting significant pressure on the Iranian economy. Iran’s currency plumbed new depths this week as Iranians brace for August 7 when Washington is due to reimpose a first lot of economic sanctions.

There are concerns in Washington, however, that such pressure could turn Iranians and the conservative sections of the regime to push for greater action against the US. Such retaliation could include attacks against US forces in the Middle East or a blockade of the Strait of Hormuz, a waterway that is a vital energy supply line for much of the world’s oil shipments.

On Tuesday, a top Iranian naval commander said the Strait of Hormuz would be affected by the US decision to withdraw from the landmark nuclear deal. Iran’s Revolutionary Guards have threatened to block the strategic waterway.

Rear Admiral Hossein Khanzadi said the functioning of the waterway depended on the “moves made by the international community based on its undertakings in agreements with Iran,” Iranian news agency Fars reported.

The Strait of Hormuz accounts for 20 per cent of the world’s oil transportation, making it the most important oil transit point in the world.