From December 2011 to January 2012, some Iranian government officials openly threatened to close the Strait of Hormuz, a major artery of the global oil market, if sanctions are imposed on Iran's oil exports. Iran's first Vice President Mohammad Reza Rahimi first stated that threat on December 28, 2011. Various Iranian naval and other commanders restated and in some cases changed the threat somewhat. For example, on January 3, 2012, the commander of Iran's regular army, Ataollah Salehi, warned the United States not to return the departing U.S.S. John Stennis aircraft carrier to the Gulf. Perhaps recognizing the potential for conflict with superior U.S. forces, a few Iranian figures, including regular Navy commander Habibollah Sayyari, issued statements downplaying or softening the warnings and threats. The Iranian threats were issued during "Velayat 90," naval exercises held from December 23, 2011, to January 2, 2012, which culminated with the test firing of Iran-made surface-to-surface missiles. Oil exports are critical to Iran, providing 76% of export earnings and 62% of government revenues. Many experts see Iran's warnings as a reiteration of its long held position to defend these exports. Iran's threats occurred as it faced increasing likelihood that multilateral sanctions would be adopted that could reduce Iran's oil export earnings. Previously, United Nations and multilateral sanctions had sought to reduce Iran's ability to develop its nuclear program by undermining its ability to develop its energy sector—targeting investment and financial linkages—but not directly targeting Iran's ability to export oil. Following a report by the International Atomic Energy Agency (IAEA) on November 8, 2011, which presented information that Iran had researched nuclear weapons designs in the past, the United States, Britain, and Canada took additional steps to shut Iran out of the international banking system. Iran reacted by expelling the British Ambassador to Iran. Then, on November 29, 2011, a mob ransacked the British Embassy in Tehran with the widely reported support of Iran's internal security force, the Basij militia. That action led to the closure of the Iranian and British embassies in London and Tehran, respectively. These events occurred at the same time Congress was completing action on the FY2012 National Defense Authorization Act ( P.L. 112-81 ), containing a provision to sanction foreign banks that do business with Iran's Central Bank. Iran's Central Bank is the prime conduit through which buyers pay Iran for oil. That bill was signed into law on December 31, 2011. The attack on British diplomatic property caused the EU to consider an embargo on purchases of Iranian oil, which was agreed to by EU foreign ministers on January 23, 2012. The Strait of Hormuz is the narrow waterway that forms the entrance to the Persian Gulf from the Gulf of Oman and ultimately the Arabian Sea. At its narrowest point it is 22 nautical miles wide and falls within Iranian and Omani territorial waters. There are two shipping lanes through the Strait, one in each direction. Each is two miles wide and they are separated by a two-mile buffer. See Figure 1 . Most observers believe that Iran, because of its own dependence on commerce through the Strait, intends to shape the international debate on Iran policy rather than to actually attempt to close the waterway. Oil exports are vital to the Iranian government's fiscal health and the Iranian economy as a whole. Iran relies on the Strait not only for its oil exports, but also for the shipment of some needed food and medical products, although Iran could attempt to re-route imports through ports outside the Strait, such as Jask, or with established overland trade routes through Pakistan or Iraq. This implies that the likelihood that Iran might attempt to close the Strait increases if a broad embargo on purchases of Iran's oil emerges. At its January 23, 2012, meeting, the EU agreed to an embargo to take full effect by July 1, 2012. This EU move might remove what may be the most important factor restraining Iran from taking that step at this time. As a result of the EU decision, some Iranian leaders immediately reiterated the threat to the Strait. Some others threatened to immediately cut off exports to the EU and thereby deny the EU time to identify alternative suppliers. Iran also may fear—and U.S. statements and actions seem to justify such a fear—that closing the waterway would provoke all-out conflict with the United States (see " U.S. Statements of Intent " below). Iran might be concerned that such a conflict would lead to U.S. military action not just to reopen the Strait but also to destroy its military and nuclear infrastructure. Further, by threatening traffic through the Straits, Iran may risk alienating other nations, including its neighbors and customers. Most of the oil from the Persian Gulf goes to Asian nations. China is Iran's largest customer and Iran is China's third largest source of oil imports. In the wake of threats from Iran, China quickly dispatched Vice Foreign Minister Zhai Jun to Tehran, presumably to try to persuade Iran to withdraw its threats. Chinese and Indian officials have indicated their countries will continue to buy Iranian crude. However, according to reports, difficulties with payment terms have led to a reduction in Chinese import of Iranian crude in early 2012. In assessing Iran's capabilities to close the Strait, Chairman of the Joint Chiefs of Staff Martin Dempsey said on January 8, 2012, that [The Iranians have] invested in capabilities that could, in fact, for a period of time block the Straits of Hormuz. We've invested in capabilities to ensure that, if that happens, we can defeat that. And so the simple answer is, yes, they can block it. Iran's naval capabilities are divided among the two main branches of its armed forces – the regular Islamic Republic of Iran Navy (IRIN, regular Navy), a holdover of the military of the former Shah of Iran, and the Islamic Revolutionary Guard Corps Navy (IRGC Navy). The IRIN controls the larger coastal combatant ships such as six Corvette-class (i.e., light frigate) ships. It also operates Iran's three Kilo-class submarines purchased in the 1990s from Russia. The more politically powerful IRGC Navy is a branch of the IRGC, which is considered allied to Iran's hardliners and which plays a role in internal security and support for pro-Iranian movements in the Middle East. The IRIN, with its larger ships, has been assigned to patrol the more open waters of the Gulf of Oman; the IRGC Navy, with its lighter fleet, is assigned to close-in waters of the Strait of Hormuz and Persian Gulf. As a hallmark of its role as guardian of the Islamic revolution, the IRGC Navy has long been perceived as more willing to undertake operations not fully vetted by senior political leaders, whereas the IRIN is considered more traditional and restrained in its approach. Through new purchases and tactics adopted since the 1980-1988 Iran-Iraq war, Iran's naval forces have developed a clear asymmetric warfare capability intended to use Iran's long coast to frustrate larger adversaries. Among other specific capabilities in Iran's inventory are: Mines . Iran is believed to possess as many as 5,000 mines of different types, including moored mines, advanced mines such as the MDM-3 that can be dropped from aircraft, and other types. Detecting and clearing mines once they have been placed in the water can be difficult and time-consuming task. Mine-clearing operations could be made more challenging if they are undertaken while U.S. and coalition forces are also attempting to counter other Iranian forces, such as speed boats, mini-submarines, and shore-based cruise missiles. U.S. and coalition forces might choose to suppress other threats before starting mine-clearing operations. This could reduce the risk to mine-clearing forces, but lengthen the total timeline for clearing the Gulf of mines. Small Boats . The IRGC Navy is perceived as a greater threat for "asymmetric warfare" because of its small fleet and unconventional tactics, such as "swarming," which it has developed since the end of the Iran-Iraq war in 1988. Swarming is characterized by deployment of dozens, or perhaps even hundreds of cruise-missile or other armed small boats, launched from different bases, to converge on and attack a discreet target such as a warship or oil tanker. Numerous U.S. observers are particularly concerned about the use of such tactics, particularly in the relatively close confines of the Strait of Hormuz. To carry out this tactic, among others, the IRGC Navy controls a large number of generally smaller ships of many different classes. These include 10 China-supplied Hudong-class missile patrol boats bought in the 1990s and equipped with C-802 sea-skimming cruise missiles; 9 C-14 missile boats, also made by China and received in 2006; another China-made boat, the MK-13 patrol craft that can be armed with cruise missiles and torpedoes; about 40 Iran-made patrol craft called the PEYKAAP; and 30-40 Swedish-made Boghammer fast-patrol boats. Iran also has an unspecified number of small boats designed in Italy (Fabio Buzzi Design) but made in Iran itself. Submarines . Torpedoes launched from Iran's three Kilo-class submarines or its up to nearly a dozen mini or midget submarines could inflict potentially devastating damage on a warship, as shown by the March 2010 sinking of the South Korean corvette Cheonan by a torpedo that South Korea, United States, and other countries concluded was fired by a North Korean mini-submarine.