Iran

Given oil prices where they are, Iran doesn't seriously believe it faces economic sanctions.

Geopolitics is all about testing each others assumptions. America is determined to put Iran's to the test -- by demanding that IAEA (of which India is a leading member) refer Iran to the Security Council.

The Acorn has outlined perfectly how India should respond.

Update: Stratfor has weighed in on this issue with an interesting perspective.

The three-day world summit in New York slated to begin Sept. 14 will present India with a prime opportunity to seat itself at a table of global superpowers. Indian Prime Minister Manmohan Singh has made it a priority for India to expand beyond its regional hegemonic status and to secure a position for itself as a major player in the global arena.

Though India appears to be on a smooth ride to an upgrade of its international status, there is a major sticking point that Singh will be forced to confront during his trip to New York: Iran.

The current political climate places India in a particularly precarious position between Iran and the United States. If forced to choose between a defense deal with the United States and defending Iran, New Delhi would be unlikely to side with Washington against Tehran. India has no interest in portraying itself as a U.S. lackey, and with the confidence that the United States views India as a long-term strategic ally, India will not risk a deterioration of relations with Iran, especially when it desperately needs the Islamic republic's energy supply. Singh will be forced to perform a careful, behind-the-scenes balancing act this week in New York to protect Tehran from U.S. action.

In reality, the United States is moderately interested in referring Iran to the UNSC. Washington does not particularly regard the United Nations as a serious body, and therefore does not regard the UNSC threat as more than public posturing. Even in the face of probable opposition from Moscow and Beijing at the UNSC, the United States would be content with issuing a U.N. resolution and watching it fail as a demonstration of the United Nations' limitations. The talk of referring Iran to the UNSC will only fuel Washington as it engages in back-channel talks with Tehran in which the real issue -- namely, the stabilization of Iraq and the containment of al Qaeda -- is discussed.