Iran may purposefully contaminate the waters of the Strait of Hormuz by performing an oil spill, according to a report in the German weekly Der Spiegel on Sunday.

The plan, codenamed “Murky Waters”, would block oil shipping routes in the Gulf. It would also drive up oil prices and force the west into an emergency cleanup in cooperation with Iran, which would likely reduce sanctions on the country.

The decision whether to implement the plan rests with Supreme Leader Ayatollah Ali Khamenei.  It is the brain child of Iranian Revolutionary Guard commander General Mohammed Ali Jafari and Navy Commander Rear Admiral Ali Fadavi.

AP reports that the Iranian army is prepared for a military confrontation with the United Arab Emirates should diplomacy over a disputed gulf island fail.

“We do not allow any country to carry out an invasion,” ground forces commander Gen. Ahmad Reza Pourdastan told Iranian state television. “If these disturbances are not solved through diplomacy, the military forces are ready to show the power of Iran to the offender. Iran will strongly defend its right.”

The Abu Musa island in the Persian Gulf is controlled by Iran, but the UAE disputes Iranian sovereignty. The island is situated at the entryway to the Strait of Hormuz, which is of critical strategic importance due to the fact that almost one-fifth of the global oil supply passes through it.

Iran has threatened to close the Strait should it be attacked.

The New York Times quoted an anonymous former senior Israeli official on Wednesday as saying that Iranian retaliation against an Israeli military strike would best be described through a formula he termed “1991 plus 2006 plus Buenos Aires, times 3 or 5.” That is, Iran’s response would be the functional equivalent of Iraq’s scud missile attack on Israel in the 1991 Gulf War, the 3000+ Hizbollah rockets fired on Israel during the 2006 Second Lebanon War, and the terror attacks on Israeli and Jewish targets in Buenos Aires in the early 1990s, multiplied in scale at least three times.

“Forty missiles fired at Israel are no small matter – but it’s better that a nuclear Iran,” the ex-official said.

This evaluation is premised on the notion that Iran would seek to avoid an all-out regional war, and suffice with a pointed yet limited retaliation. Recent comments by the US Chairman of the Joint Chief of Staff notwithstanding, this is a shaky premise, and US defense experts concede as much.

The report went on to say that the Pentagon believes that attacking Iran would serve as a pretext for Iran to block the Strait of Hormuz, and would also result in a missile salvo on Israel regardless of whether it was responsible. Iran would be cautious with respect to American interests and targets, knowing that the US has the wherewithal to permanently incapacitate its nuclear program.

In related news, the US Air Force Chief of Staff sought to allay speculation that the US has precluded the military option against Iran by telling reporters Wednesday that the US has drafted military plans to strike Iran’s nuclear sites, according to the Bloomberg News Agency.

General Norton Schwartz was also reported to have said “What we can do, you wouldn’t want to be in the area.”

Bloomberg also quoted Pentagon officials, who delved into specifics but spoke on condition of anonymity since the plans are confidential. The military contingencies that have been prepared include providing aerial refueling for Israeli jets, launching attacks against the Revolutionary Guard Corps and its elite Quds Force, as well as regular Iranian military bases.

These comments appear to be the latest missives in the Obama Administration’s attempt to beef up its image as tough on Iran. There have been reports of Israeli displeasure with what they perceive as an official administration line downplaying the chances of a military strike, and in the process diminishing the West’s deterrent power.

No sooner do we establish that (a) Iran wants strategic ambiguity, and (b) Iran’s got it, than we see a fresh round of strategic ambiguity busting out.  Strategic ambiguity looks to be the gift that will keep on giving.

You might think the big news from the last 24 hours would be the report that Iran declined to load a Greek tanker with oil for Greek refineries, thus sparking concerns that the Iranians will cut off oil to hard-pressed Greece entirely.  Tehran has already officially stopped deliveries to France and the UK.  The Europeans are worried that a cut in Iranian oil could sink any hope of a recovery for the Greeks – and that Iran might threaten to extend the embargo to Italy, which also depends on Iranian oil.

In the wake of this report, the Iranian government hastened to announce that it hasn’t cut off shipments to Greece.  So it isn’t clear what’s going on, and strategic ambiguity can check another item off the to-do list.   Gasoline has surged to about $8.10 a gallon in the UK (not yet the $9.00 a gallon being trumpeted by Iranian media), so – check, check!

But that’s not really the big news.  The big news is that the Iranian parliament is working on legislation that would require foreign warships to obtain permission from Iran to pass through the Strait of Hormuz.  How could Iran enforce such a requirement?  Well, that’s exactly the fun of strategic ambiguity.   Maybe they’ll try, and maybe they won’t.  As the Iranians say, ‘it will depend on us.’

Apart from a last-ditch resort to something like mining the Strait of Hormuz (SOH), the most likely Iranian approach would be to take advantage of an incident in the SOH, or even create one, to justify cranking up Iranian oversight of “safety and security” by half a notch or so.  A diplomatic win on that exploratory probe could be leveraged to increase Iran’s effective control incrementally – unless each new measure was directly challenged.  If the US were unwilling to do the challenging, strategic ambiguity would be a lot more fun for Iran than for the rest of us.

You do need a quiescent partner on the other side of the Strait for an oblique approach of this kind.  And sure enough, besides conducting a naval exercise in the Strait of Hormuz (SOH) in mid-February, Iran concluded a new naval cooperation agreement with Oman on the 12th, and plans to conduct a joint naval exercise with Oman in March.  Earlier in February, moreover, the Iranian navy’s commander stated that the Iranian naval task force in the Red Sea would visit the port of Salalah, Oman in March.  That would be a first since the 1979 revolution, and would put the Iranian navy in the company of all the other global navies in the region (including the US Navy), which visit the major port of Salalah on a regular basis.  Iran is establishing a new naval posture as we speak.

The new Iranian naval posture extends its strategic ambiguity to Saudi Arabia.  During the Iranian task force’s triumphal sideswipe at Syria – where the ships reportedly entered port, although the Pentagon “has no evidence of it” (see my comment at this link for a summary of data points on the question) – an Iranian parliamentarian announced that Iran was displaying her naval power in the region, as a warning and a portent.  The ships had stopped in Saudi Arabia’s Red Sea port of Jeddah on the way to the Mediterranean, so this saber-rattling didn’t sit well with the Saudis.

Therefore, the Saudi ministry of defense has just issued a statement clarifying the basis on which it authorized the Iranian warships to visit Jeddah.  And the salient point is that Saudi Arabia wasn’t down for the “naval warning” business.  The Saudis understood they were agreeing to a port visit for ships on a training cruise.

In general, the Saudis are feeling squeezed by Iran; a Die Welt report from 15 February, summarized at the al-Akhbar website on the 21st, indicated that Riyadh sponsored a Gulf States  meeting in January to discuss Iran’s continued arms sales to Hezbollah.  The Saudis didn’t openly disclose anything we don’t already know about the Iranian smuggling routes, but apparently they excluded Qatar from the meeting, because they don’t consider the emirate “reliable on issues related to Iran.”

Meanwhile, down south of the Saudi border, Iran continues to supply the Houthi rebels in Yemen – a Shia group that operates as a scourge of Riyadh as well as Sana’a.  On 15 February, Yemeni authorities reported intercepting another ship from Iran carrying heavy weapons for the Houthis.  It is accepted fact in the Arabian Peninsula that Iran’s paramilitary operates from islands in the southern Red Sea, supporting activities in both Yemen and Eritrea.  In a recently translated al-Arabiya interview from June 2011, a Kuwaiti professor stated that Iran leases three islands from Eritrea and uses them for military training.

Two Iranian officials on Monday reiterated threats that their country would block the Strait of Hormuz, in retaliation for oil sanctions on the Islamic theocracy.

The remarks were made in anticipation of the EU decision to institute an oil embargo on Iran.

A day earlier, US aircraft carrier USS Abraham Lincoln sailed through the Strait of Hormuz without incident. Iran appeared to be lowering the rhetoric in light of comments by a senior Revolutionary Guard Corps official acknowledging that the return of US carriers was “routine”.

Iran’s ambassador to the United Nations reiterated his country’s stance that closing the Strait of Hormuz is an option if Iran deems it necessary to deal with a security threat.

“There is no decision to block and close the Strait of Hormuz unless Iran is threatened seriously and somebody wants to tighten the noose,” Ambassador Mohammad Khazaee said on a PBS news program. “All the options are or would be on the table.”

Meanwhile in Washington DC, the White House is still hoping Iran will take “a peaceful way out” of the controntation over its nuclear program.

“If the Iranians are serious about restarting talks, then they need to respond to [EU envoy Catherine Ashton's] letter,” White House spokesman Jay Carney said to reporters in a White House briefing. “That is the channel by which…the restarting of those talks would take place.”

Carney declined to comment on reports that President Barack Obama sent Iranian leaders a letter suggesting direct talks.

Iran confirmed on Sunday that it had received a letter from the US government responding to Iran’s threat to close the Strait of Hormuz should sanctions prevent it exporting oil.

“America’s message over the Strait of Hormuz reached us through three channels. It was given to our UN representative, the Swiss ambassador conveyed it to the Foreign Ministry and also Iraqi President Jalal Talabani gave the message to Iran,” a Foreign Ministry spokesman said.

The New York Times reported that the contents of the letter conveyed to Iranian Leader Ayatollah Ali Khameneni that closing the Strait would constitute crossing a “red line.”

Iran has not yet decided if it would reply to the letter.

Israel’s intensifying readiness to launch a military strike against Iran has met with a negative US response, with top government officials being dispatched to the Jewish state in the attempt to thwart an attack.

US President Barack Obama, who has made the US position against an attack on Iran known through Defense Secretary Leon Panetta as well as through private phone conversations to Prime Minister Binyamin Netanyahu, is now sending chairman of the Joint Chiefs of Staff General Martin Dempsey to Israel to discourage the Jewish state from taking unilateral actions.  Dempsey will be in Tel Aviv next week, where he will meet with Israeli military officials including Israeli Defense Minister Ehud Barak and Chief of Staff Lt.-Gen. Benny Gantz .  Dempsey will attempt to convince officials that US-imposed sanctions are sufficient to protect against an Iranian nuclear attack on Israel.

Despite a growing number and degree of international sanctions, Iran has remained seemingly undeterred in its quest for nuclear capability, warning Arab states not to take part in a drive to stop Iran’s atomic development, chastising nations which have taken steps to punish the country, and relocating enrichment facilities to hidden underground locations.  It has also threatened to block oil transports through the strategic Strait of Hormuz.

Now, all heads are turned toward Israel, which has stated in the past that it will take necessary measures to prevent Iran from gaining nuclear weapons, steps which it sees as potentially unavoidable for protecting the continued existence of the country. “It is the policy of the Israeli government, and the Obama administration, that all options remain on the table. And it is crucial that the ayatollahs in Tehran take this policy seriously,” said Michael Oren, Israel’s ambassador to the U.S.

As Iran has continued its nuclear development, an increasingly heated war of words has ensued between Israel and Iran, with Iranian officials daring Israel to attack “if the Zionists like to sit on wheelchairs”, and Israel stating that ramped up threats against it make a strike against Iran “more and more likely”.

For its part, the US military is preparing for repercussions to its operations in the Middle East as a result of an Israeli strike on Iran.  Of particular concern to the US are its various embassies and diplomatic outposts, with a staff of 15,000.

Israel and the US have planned a coordinated massive missile defense drill for later this year, called “Austere Challenge”.