“The Islamic Republic of Iran has made up its mind based on the experience of the past 27 years to forcefully pursue its nuclear program and other issues it is faced with and will rely on God… Be patient, and hopefully we will taste a sweet outcome.” Those are the words of Iran’s supreme leader Ayatollah Ali Khamenei, rejecting a package of incentives designed by the United States, Russia, China, Britain, France and Germany to persuade the nation to voluntarily stop enriching uranium.

So now an Iran/US showdown looms, possibly leading to economic sanctions – although such a policy is akin to cutting one’s nose off to spite one’s face. Cutting the oil-rich Iran out of international trade of course hurts Iranians, one need only look at Iraq during the 1990s for evidence, but it will also hurt other countries, specifically countries that depend upon imported oil – Australia-like countries.

A fact that the Iranians are all too aware of. As reported in the Oz, Foreign Ministry spokesman Hamid Reza Asefi argued that sanctions won’t be utilised: “Iran’s influence in the region is clear,” he said. “A country like Iran has extensive political, economic and cultural capabilities… Will other countries ignore Iran’s capabilities in their political and economic co-operation?”

The news of Iran’s rejection of the incentives sent oil up from the two-month lows seen at the end of last week – US light, sweet crude settled US$1.31 higher at US$72.45 after it went as low US$69.60 on Friday. Gold also became a lot more attractive after significant falls last week, up $13.10 (or, 1.8%) to US$634.80 in overnight trading.

Iran claims that the uranium enrichment process is only for energy, common sense disproves such an argument. Why would one of the world’s most energy-rich nations need to develop costly, messy and not particularly efficient uranium energy?

Read more at Henry Thornton.