The good old Iraq playbook is being played to the dot, just less than a decade later, and now with Iraq neighbor off by just one letter: Iran. According to Haaretz, the UN Security council "denounced Iran's failure to abide by United Nations resolutions demanding an end to the possible weaponization of its nuclear program. The Denouncement comes after International Atomic Energy Agency submits a report claiming Iran continues to make advances in uranium enrichment beyond its needs for medical applications. The United States, Germany, France and Britain joined forces in exposing Tehran's advanced 20-per-cent uranium enrichment, which is considered military weapons grade. Tehran said its enrichment program was needed for medical and civilian uses. But the UN said Tehran has not been transparent and failed to cooperate with the Vienna-based International Atomic Energy Agency (IAEA), which recently submitted a report that Iran continued to make advances in uranium enrichment beyond its needs for medical applications." Whether the US, pardon the UN, will follow up with ever escalating following directives that ultimately lead to nothing short of a land invasion is unknown for now, but if history tis any precedent, the answer is a resounding yes. Furthermore, today's decision should be taken in context with the major article in the WSJ "US Eyes Covert Plan to Counter Iran in Iraq" which does nothing but set the scene for what will inevitably follow in a few weeks or months. Expect a flare up in anti-Iran rhetoric in the next few days.

From the WSJ:

Military commanders and intelligence officers are pushing for greater authority to conduct covert operations to thwart Iranian influence in neighboring Iraq, according to U.S. officials. The move comes amid growing concern in the Obama administration about Iran's attempts in recent months to expand its influence in Iraq and the broader Middle East and what it says is Tehran's increased arms smuggling to its allies. Compounding the urgency is the planned reduction in the U.S. military presence in Iraq by the end of the year, a development that many fear will open up the country to more influence from Iran, which also has a majority Shiite population. If the request is approved by the White House, the authorization for the covert activity in Iraq likely would take the form of a classified presidential "finding." But unlike the secret order that authorized the Central Intelligence Agency's campaign against al Qaeda in 2001, the current proposal is limited in scope, officials said. Officials declined to provide details about the kinds of covert operations under consideration, but said they could include more aggressive interdiction efforts at the Iraq-Iran border and stepped-up measures to stop Iranian arms smuggling after the American drawdown. The United Nations has prohibited Iran from exporting arms. However, defense officials say, Tehran continues to supply weapons parts to Shiite militias in Iraq.

Right, and when it comes to "defense officials", we should always take their word, whether it is for secret knowledge of weapons of mass destruction, Iraq's massive nuclear armament, or any other watercooler soundbite that Joe Sixpack is delighted to regurgitate the next day to his minimally paid coworkers.

Iranian officials have repeatedly denied that they have played any role in arming militants in Iraq or worked to destabilize other Arab nations. Tehran has claimed the U.S. has leveled charges of arms smuggling to justify a continued American military presence.

As the NYT noted before contrary to Israel demand for an immediate invasion discussed previously, the US military still understands that yet another US-sponsored land invasion in the Middle East may prove complicated to be spun as a humanitarian intervention to even the greater American unwashed.

Both military and senior Obama administration officials believe they must proceed cautiously to ensure that any expansion in covert action doesn't prompt Tehran to retaliate and inadvertently trigger a wider conflict.

Yet behind all the media spin rhetoric, the stage is now set:

Special operations forces would have the ability to carry out risky capture-or-kill missions that the CIA may not be able to conduct on its own. A new finding also would ensure that the CIA and military special-operations forces working for the agency have the legal ability under U.S. law to shut down the flow of arms from Iran to allied militia groups. Other officials, including some in Congress, favor a broader secret campaign against Iran to block its support to Syria or to other militant groups elsewhere in the Middle East.

In retrospect, the only thing oil needs in addition to QE3 being launched in 2 weeks is a major military campaign against one of the biggest petroleum countries in the world. It does however, explain why WTI is now inching into $90s territory, and why Brent will soon take out its all time highs.

The full IAEA report can be found here.