Since the less-than-bombshell release of the International Atomic Energy Agency report on Iran this week, the Obama administration has, to its credit, refused to rattle its sabers. That isn’t the reason, I presume, that hawkish Middle East advisor Dennis Ross is quitting and going back to his perch at the AIPAC-founded, pro-Israel think tank the Washington Institute for Near East Policy, but his departure certainly take out a key member of the administration’s hawkish contingent.

Then we come to Leon Panetta, who sometimes seems overwhelmed in his new job as secretary of defense. Panetta, though, sounded a distinctly dovish note on Iran, issuing a strong warning against the idea of war with Iran: “You’ve got to be careful of unintended consequences here. And those consequences could involve not only not really deterring Iran from what they want to do, but more importantly, it could have a serious impact in the region and it could have a serious impact on US forces in the region.” Well said.

Writing in Foreign Policy, Karim Sadjadpour of the Carnegie Institute recalls a 2009 war game that he took part in, in which he played the Iranian side. In response to an Israeli attack, Sadjadpour’s Iran struck back at oil installations in Saudi Arabia and the gulf, pushed Shiites to revolt in Saudi Arabia, hit Israeli “military and nuclear targets” and pressed Hamas and Hezbollah to attack anti-Iran targets and struck at European military and civilian targets in Afghanistan and Iraq, and “activated terrorist cells” in Europe, while being careful not to attack American targets to avoid a US response.

It’s not clear to me that Iran can actually do all that, if Israel attacks, but some of it is very likely to occur, and the among the “unintended consequences” that Panetta talks about would be a huge spike in the price of oil.

A worrying, and destabilizing sign, is the United States plan to sell thousands of “bunker-buster” bombs to the kleptocrats who control the United Arab Emirates. (The United States is already selling similar stuff to Israel, too.) I’d read that not as an effort to arm the UAE for war with Iran, although that’s how it will be interpreted in Iran, but as part of the overall US effort to strengthen its influence among the oil-rich thievery states of the gulf, especially as the United States pulls out of Iraq.

Despite the IAEA’s lack of a smoking gun, it’s clear to me, at least, that Iran sees its nuclear program as having a military dimension, even if it’s still years away from having a bomb. It’s becoming clearer and clearer that there’s no apparent way of stopping Iran from building a bomb, if that’s what they intend to do, and so the world had better get ready to deal with an Iran that has a bomb, just in case.

Indeed, that’s exactly the conclusion of an Israeli research firm, as reported by Reuters:

A leading Israeli investment firm said on Thursday any military strike on Iranian nuclear facilities would exact an economic price too high for the world to accept, and as a result, it would likely acquiesce to a nuclear Iran.

A sharp rise in the price of oil, the costs of war and the damage to global trade would be too great and deter world powers from taking any serious action, said Amir Kahanovich, chief economist at Clal Finance, one of Israel’s largest brokerage houses.

The assessment differed sharply from Israel’s official position that Tehran’s nuclear aspirations are unacceptable and that all options are on the table in preventing a nuclear-armed Iran, which it views as a threat to its existence.

In a report “The Iranian Issue through Economic Eyes,” Kahanovich laid out courses of action—ranging from additional "light sanctions" to military strikes—and told investors the world would likely balk at taking the steps needed to stop Iran from developing nuclear weapons.

Even for Israel the economic cost of a military confrontation that could include retaliatory missile attacks by Tehran and proxies in Gaza and Lebanon would be too high, Kahanovich wrote.

“Unfortunately, it appears that a nuclear Iran is the most reasonable scenario,” he added.