Newsmakers and even the oil markets (USO, X, USL) have learned to get used to tensions between the West and Iran.  Last week, an Iranian physics professor linked to the country’s nuclear program was assassinated.  Iran blamed Israel and the United States for the remote control bombing of the man’s car.  Iran, for once, was probably right.

Foreign spies in Iran are likely trying to help make it clear to the Iranian government that Israel and the United States will not tolerate Iran’s nuclear program.  The bombing forces many scientists in Iran think twice about their profession.

Next door, in neighboring Iraq, the country is accepting 100 billion in foreign investment that will update Iraq’s aging oil production capabilities, possibly allowing them to produce much more oil and become a more important player for the oil market.  Some peak oil analysts now even see a risk in the idea that oil production has hit its peak due to the new investments.  Others contend that cheap oil production has still hit its peak but more expensive production will continue to help meet demand.

Either way, Iran is left with aging oil producing technology and a desperate radical religious government which has demonstrated a disregard for its citizens in recent anti government flare ups.  Their government does not hesitate to turn the country’s attention on their battle with Israel and the United States to garner nationalist sympathy and turn their citizens’ attention away from internal struggles.

But the recent killing of the professor suggests that the empty threats are becoming decreasingly empty and increasingly real.  In slow motion, we may be witnessing the path to war, where an unreasonable…