In every poker game, sooner or later, you've got to put your cards on the table.

Today Bloomberg Business News reported: "Crude also rose (to $102 per barrel) as the U.S. and its allies increased pressure on Iran to halt what they say may be a covert nuclear weapons program. Sanctions signed into law by President Barack Obama on Dec. 31 aim to deter dealings with the Iranian central bank. The European Union, which is considering a ban on oil from Iran, will be ready by Jan. 30 to decide whether to extend sanctions, Michael Mann, a spokesman for the EU, said yesterday."

As you know, Iran drew the world's attention when it announced weeks ago that it intended to conduct 'war games' and exercises to close the Strait of Hormuz. That is the channel in the Persian Gulf through which 40 percent of the world's oil is shipped by Iran and other OPEC nations such as Iraq, Kuwait, Saudi Arabia and the United Arab Emirates.

Closing down the Strait to oil exports is "easier than drinking a glass of water", said Iran's Navy Chief Habibollah Sayyari. The implied threat is a response to the U.S., France, Britain and Germany, among others, if sanctions are imposed on Iran's oil exports. France, Britain and Germany have proposed sanctions to punish Iran's lack of cooperation on its nuclear program.

In recent days Iran elevated tension in the area after it announced that it had test-fired long range missiles. Some have dismissed the maneuvers as mere 'saber rattling', with no significant intentions behind them. Others are not so sure.

To gently persuade Iran to reconsider its threat, the U.S.S. John C. Stennis aircraft carrier (seen in photo above) moved into the area. Cmdr. Amy Derrick Frost, spokeswoman for the U.S. Navy's 5th Fleet in Bahrain, responded at the time, "Anyone who threatens to disrupt freedom of navigation in an international strait is clearly outside the community of nations; any disruption will not be tolerated."

The aircraft carrier also left the area without incident and upon its departure, Iran today warned the U.S. not to return to the Persian Gulf region.

The Islamic Republic of Iran will not repeat its warning," said Maj. Gen. Ataollah Salehi, commander of Iran's Army, according to the state-run news agency IRNA. Salehi "said the country will not adopt any irrational move but it is ready to severely react against any threat."

What does all this mean? Clearly, Iran is intent on asserting its military capability, but is it truly determined to shut down a vital trade route in international waters? When its own currency has sustained significant declines? I doubt it.

To date, OPEC has kept its cards close to the vest. For all the indignation some might show to Western media, OPEC has remained conspicuously quiet on the matter. Yes, Iran is the "loose cannon" for now... And apparently, loose cannons that can add a premium to world crude oil prices serve their purpose.