Iran threatens higher oil prices over nuke standoff

In yet another reminder of the need to reduce our dependence on Middle East oil, Iran is ramping up the rhetoric in the war of words (for now) over its nuclear program. The message: mess with us, we mess with your oil.

As diplomats from the US, Europe, Russia, and China prepared to meet today in London to discuss referring Tehran to the UN security council, Iran's economy minister, Davoud Danesh-Jafari, said the country's position as the world's fourth-largest oil producer meant such action would have grave consequences.

"Any possible sanctions from the west could possibly, by disturbing Iran's political and economic situation, raise oil prices beyond levels the west expects," he told Iranian state radio.

Can any industrial economy afford to ignore a threat such as this? If it is taken seriously, what next?

The United Nations is trying to come up with something. So far, nobody seems crazy about the sanctions idea in the first place.

China, Russia, France, the United States, Germany, and Britain expressed "serious concerns" about Iran's resumption of small-scale uranium enrichment, Britain's Foreign Office said.

The powers stopped short of referring the issue to the U.N. Security Council, which could impose sanctions, instead calling for an emergency board meeting of the International Atomic Energy on Feb. 2-3 to discuss the issue. The 35-nation IAEA board could itself refer the issue to the Security Council.

What will it take for the United States to stop formulating its foreign policy around the need for reliable supplies of oil? If not this, then what?