INTERNATIONAL oil politics, the murder of an Iranian nuclear scientist and reports of renewed uranium enrichment by the Islamic Republic are all factors contributing to keeping tensions between the West and Iran at an uncomfortable level. A car bomb in Tehran claimed the life of Mostafa Ahmadi Roshan recently; the scientist worked at the Natanz nuclear facility and his assassination brings the number of Iranian scientists killed in similar fashion to four since 2010. It appears the assassination had Israel's fingerprints all over it.

Eyebrows have also been raised by reports that Iran is enriching uranium at an underground bunker.

Meanwhile, the European Union has nearly finalised an agreement to embargo Iranian oil. The EU is the second largest market for Iranian crude. While 'punishing' Iran for its supposed nuclear pursuits by banning oil exports will surely hurt the Islamic Republic, it will jolt the European and global economy just as much. TheEuropeans need to ask themselves if fragile economies such as Italy, Greece and Spain will be able to sustain themselves once world oil prices rise, which they most likely will once Iranian crude is blocked.

The confrontation and the possibility of Iranian crude being blocked has also worried Beijing and on Saturday the Chinese prime minister travelled to oil-rich Saudi Arabia which could provide a solution. Also, Washington continues to talk tough, with top US officials refusing to rule out military action against Iran. Given that 2012 is an election year in America, there is much anti-Iran rhetoric from both the Republican and Democratic camps. To bring down the temperature, the Iranians should fully cooperate with an IAEA team that is due in Tehran later this month.

Punishing Iran with more sanctions or worse, military aggression, will have highly undesirable consequences. Diplomacy and dialogue are the only solutions to this crisis.