Iran's Achilles Heel---Petroleum

That which nourishes them may destroy them:

But is energy really Iran’s trump card, as some have suggested? In fact, a closer look indicates that the “oil weapon”—whether in the form of reductions in Iranian output or military moves in the Hormuz Strait—is likely to be a double-edged sword for the Islamic Republic.

For all of its energy clout, the Islamic Republic is not impervious to economic countermeasures. The vast majority (80 to 85 percent) of Iran’s export earnings, as well as one half of its budget and a quarter of its gross domestic product, currently derives from energy sales. As a result, over the past two years Iran has reaped a staggering fiscal windfall, amounting to dozens of billions of dollars, from the rising price of world oil. But Iran’s single-sector economy is deeply dependent on foreign direct investment to maintain this output. If they were to be applied consistently and multilaterally, therefore, measures that reduce the foreign capital flowing into Iran’s energy sector have the ability to cause Tehran some serious economic pain.

In particular, Iran is severely susceptible to domestic pressure. Despite massive oil exports (some 2.5 million barrels a day), Iran currently imports a third or more of its refined petroleum products from abroad, at a cost of over $3 billion annually. These imports are not simply surplus; according to some estimates, Iran maintains just 45 days worth of gasoline domestically. Since all politics is ultimately local, this suggests that the inevitable economic squeeze that would accompany an Iranian energy play is likely to reverberate within Iranian society in the form of gasoline shortages and steep price hikes at the pump. And that, in turn, could create major domestic problems for Iran’s ayatollahs.

The Iranian Navy isn't exactly a powerhouse. Once we actually commit to military action, the mullahs will find their best-laid plans count for naught.