Iran threatened to trigger an international energy crisis when its parliament drafted a bill to blockade the Strait of Hormuz, the waterway to a fifth of the world’s traded oil.

The national security committee said it had prepared legislation authorising the closure of the Strait to tankers bound for the European Union. MPs said the move was designed to punish the EU after its embargo on Iranian oil exports came into force on Sunday.

It remains far from clear that Iran has the military wherewithal to impose any kind of blockade, which could trigger a military confrontation with the West, and the threat may amount to little more than posturing. The Iranian parliament furthermore holds little power and a decision on the blockade would be taken by the regime’s leadership.

However after repeated threats, this is the first formal proposal of a course of action that would have severe consequences for the global economy.

Kayhan, a newspaper viewed as the mouthpiece of government hawks, carried an editorial calling for a blockade.

“The US, Europe and some Gulf countries, particularly Saudi Arabia, should have no doubt that Iran will not hesitate to shut down the Strait of Hormuz if it is deprived of its obvious and legal right,” the editorial read.

Tehran also embarked on military exercises in its central desert designed simulate missile attacks against Western and Israeli military bases.

The EU boycott was approved in January but only fully implemented on Sunday. It follows American sanctions punishing countries conducting oil deals with Iran’s central bank that came into force last week.

Despite seeing its oil exports fall by a third as a result, and with other countries meeting the shortfall, Iran insisted that it could see off the threat to its economy, saying it had GBP 95 billion in foreign reserves to fall back on until it finds new customers.

“Iran has many friends across the world and it not concerned about the sale of its oil at all,” said Rostam Ghasemi, the country’s oil minister.

Kenya became the first such friend to step forward, defying the threat of US sanctions to sign a deal to buy 80,000 barrels of crude a day -- making up roughly 10 per cent of Iran’s shortfall.----

Source: http://www.telegraph.co.uk/news/worldnews/middleeast/iran/9371090/Iran-threatens-oil-blockade.html