KEY POINTS:
While Asia is focused on forthcoming disarmament negotiations following North Korea's nuclear weapon test, a similar crisis is brewing over Iran in the Persian Gulf, the source of most of the imported oil reaching Asia's economic giants, Japan, China, South Korea and India.
Iran is probably at least several years away from being able to build and detonate a nuclear bomb. But the United States and Europe, followed somewhat lamely by China and Russia, worry that Iran is determined to follow North Korea's path.
Iran, which was test-launching missiles in a show of strength a few days ago, already has the largest number of ballistic missiles in the Middle East. Some can reach Israel, a key US ally in the region. They can also reach countries in and around the Gulf. Most of these states are ruled by Sunni Arab regimes. They fear Iran's rise and the expansionist ambitions of its Shiite theocracy.
Tehran is extending the range of its missiles so that they will be able to reach Europe and the US. Like North Korea, Iran aims to make nuclear warheads small enough to fit on the nose cones of its long-range missiles.
For Pyongyang and Tehran, this will be the ultimate reassurance of national security and regime preservation. It may also usher in a new era of nuclear blackmail and leverage.
Meanwhile, Iran has been strengthening its conventional military arsenal with help from China, Russia and North Korea.
It is preparing for an armed confrontation with the US and its allies who want to prevent Tehran from going nuclear. Senior Iranian officials often hint that their armed forces can retaliate against the West in a number of ways.
One is by disrupting oil supplies from the Gulf. Tankers carry the oil through the Strait of Hormuz, which is 55km wide at its narrowest point and the only way into and out of the Gulf by sea.
Iran has a commanding position all around the northern rim of this strait. About 40 per cent of the crude oil traded in the world each day passes through this bottleneck.
Any disruption would panic markets, making prices soar. It would jolt the world economy, which has been struggling for much of this year to absorb the impact of oil costing more than $US60 a barrel.
But the repercussions would be most severe in Asia. The US gets about 22 per cent of its oil imports from the Gulf, and Europe 30 per cent. But Asia relies on the Middle East for nearly 75 per cent of the oil it buys from abroad.
Japan, for example, imports all its oil and 89 per cent comes from the Middle East, defined as the Gulf oil exporters plus Oman and Yemen.
Asia's two emerging economic giants, China and India, are also heavily reliant on the Middle East for their oil supplies, India for about 70 per cent of its imports and China for around 46 per cent. Singapore, South Korea, Taiwan, Thailand and the Philippines each depend on the Gulf for more than 70 per cent of their oil imports.
Partly as a result of this dependence, many Asian countries are wary of offending Iran and are siding openly with the US and Europe in the dispute over Tehran's nuclear programme.
Iran has also been diversifying its foreign trading partners to reduce reliance on the West. Asia's share of Iran's trade has increased to nearly match Europe's 40 per cent share. Tehran sees diversification as a buffer against efforts to isolate it.
Asian oil importers remember all too vividly the tanker war during the Iraq-Iran conflict in the 1980s, when both sides attacked the ships carrying oil to Asia and other parts of the world.
Of course, Iran itself would suffer from retaliatory strikes. And its economy would be hurt by any prolonged closure of the Hormuz Strait.
But Iran is now much better armed with missiles, mines, submarines, torpedoes, surface warships, fast-attack craft and coastal artillery than it was in the fighting with Iraq. In any future conflict with the West, Tehran might be able to cause more disruption and delay to oil shipments than in the 1980s, when the US and other foreign navies banded together to try to protect laden tankers as they left the Gulf.
In the current crisis over North Korea, Japan and Australia lined up with the US to enforce sanctions. But China, South Korea and India, among others, were reluctant to squeeze North Korea too hard.
As major oil importers from the Gulf, they would be softer still if Iran was involved. It would be obvious then that Asia's energy security interests had trumped its non-proliferation concerns.
* The writer is a visiting senior research fellow at the Institute of South East Asian Studies. This article is a personal comment.
