Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.
U.S. defense officials say they will continue to deploy warships in the Persian Gulf, following Iranian threats to act if the U.S. Navy moved an aircraft carrier to the area. U.S. defense spokesman George Little said authorities would not permit the closing of the Strait of Hormuz, the crucial passageway for oil shipments from the region, "in accordance with longstanding U.S. commitments to the region's security and stability."
Iranian comments on Tuesday, apparently directed at the aircraft carrier USS John C. Stennis, currently in the Arabian Sea, follows Western moves to ratchet up sanctions on Iran's central bank and oil exports. The sanctions are tied to concerns over Iran's nuclear program, which Western states fear is cover for a weapons program. Officials in Tehran deny this, and they also on Tuesday dismissed links between new U.S. sanctions and the sharp slide in the value of its currency (LAT), the rial.
The rise in tensions contributed to a jump in oil prices (WashPost) of more than 4 percent on Tuesday.
The latest round of sanctions and rhetoric over the Persian Gulf highlight that "Iran and the U.S. are already fighting a low-level economic war that seems likely to escalate in the months ahead," writes Yochi Dreazan in theNational Journal.
National security expert Graham Allison says Iran's warnings are not only directed at the United States but at the shaky global economy and should be seen as a test of Western interests (MSNBC) in the area.
CFR's latest interactive crisis guide on Iran surveys the country's domestic tensions, regional ambitions, and the scope of its nuclear program.
Libya Picks New Armed Forces Chief
The interim government named Yousef al-Manqoush as head of the armed forces (al-Jazeera), on a day in which four people were killed in a battle between rival armed groups in Tripoli, underscoring concerns about militias at large in Libya.
A tour through Libya finds a country both desperate and hopeful of being able to construct a new democracy, writes a correspondent for Germany's Spiegel magazine.
Japan's Premier Cites Fiscal Crisis
Prime Minister Yoshihiko Noda used his first news conference of the year to stress the need to raise the consumption tax (JapanTimes) to cover soaring expenditures for social security.
Meanwhile, Noda's year-end visits to China and India signal a revived Japanese agenda of strategic engagement in Asia even as the prime minister navigates tough domestic issues, writes CFR's Sheila Smith.
SOUTH AND CENTRAL ASIA
A Taliban Office in Qatar
The Afghan Taliban have confirmed an agreement with the government of Qatar to open a political office there, establishing a channel of communications that could lead to substantive talks over Afghanistan's future (CSMonitor).
New Warnings on Greek Debt
The Greek government today begins crucial talks with labor leaders to try to reduce costs and enhance competitiveness. A government spokesman has warned Greece could leave the euro zone (DeutscheWelle) if it doesn't reach a second bailout deal with lenders.
Protests Spread in Nigeria as Subsidy Ends
Nigerians took to the streets in a number of major cities and snarled traffic to protest the government's removal of fuel subsidies (allafrica.com).
Romney Wins GOP Iowa Caucus
Mitt Romney edged Rick Santorum by eight votes to win one of the closest Iowa Republican caucuses in years. Santorum emerges from the first presidential nominating contest of 2012 as the latest compelling story, saysPolitico.
CFR's James Lindsay said ahead of the vote that a win by Santorum could set the stage for a showdown with Romney in South Carolina in that state's primary January 21.
Ecuador: An appeals court has upheld an $18 billion judgment against U.S. oil company Chevron (Bloomberg)for environmental damages it allegedly caused in the Amazon River basin more than twenty years ago.
This CFR slideshow looks at ten instances in which multinational corporations were involved in industrial incidents and their legal and regulatory aftermath.
Regulators Missing Dodd-Frank Deadlines
Regulators have missed roughly three-quarters of deadlines for implementing the Dodd-Frank financial reform plan (The Hill) through 2011, according to a new report by law firm of Davis Polk.
RAIL: Construction is set to begin this March on a multibillion dollar elevated rail line (NYT) on the western side of Oahu, Hawaii. The project is expected to encourage economic development in the rural area.
Renewing America is a special CFR project focused on the domestic underpinnings of U.S. global competitiveness, including the debt and deficit, infrastructure, education, innovation, trade, and corporate regulation and taxes