The United States and the European Union are moving to choke off Iran's all-important oil exports through sanctions against the country's central bank, which handles all energy transactions.
The Islamic Republic is threatening to close the strategic Strait of Hormuz, the gateway to the gulf through which at least 20 percent of the world's oil supplies pass every day, if those measures are imposed.
Either alternative could send oil prices soaring. Together, they could cause a lot of economic pain on a global scale.
"Oil is being used as a weapon once again, but this time it isn't just one of the exporting nations which is using it -- the industrialized nations are also turning it into an instrument against Iran," German newsmagazine Der Spiegel observed.
"A duel of the boycotters is taking shape, a new energy conflict between a supplier and its customers, waged with the tools that each side has at its disposal to exert pressure on the other."
But experience has shown that the oil weapon, whether wielded by producers or consumers, has proved to be largely ineffective.
"Both sides are always dependent on one another," Der Spiegel noted, "with the producers needing the money and the consumers needing the fuel. This mutual dependence guarantees that economic realities will ultimately lead to compromise."
But the current crisis is unique in that this time around both sides are threatening to take action at the same time, with little room for compromise.
And, theoretically at least, the global impact could be much greater -- not to mention far more violent, with potentially dangerous repercussions across the entire Middle East at a time of region-wide political turbulence in which the geopolitical stakes are possibly higher than they've ever been.
If Iran does take military action to block the narrow 112-mile Strait of Hormuz, such as mining it or raining anti-ship missiles on the 15 or so supertankers that sail through the waterway every day, the United States will retaliate and try to keep the strait open.
There's a school of thought in the West that says Tehran is bluffing, since its oil exports, the bedrock of its already beleaguered economy, would be cut off along with those of Saudi Arabia and its fellow Arab monarchies.
Russia and China, along with other major importers of Iranian oil in Asia, such as India and Japan, have opposed U.S.-led efforts to throttle Iran's economic lifeline.
However, there are signs that this is changing, and that's the worst kind of bad news for Iran.
The danger is that this could push the Tehran regime, or senior commanders of the powerful Revolutionary Guards Corps who are almost a law unto themselves anyway, into opting for military action on the grounds that if Iran can't export the Saudis and their allies won't be allowed to either.
China, Japan, India and South Korea import more than 60 percent of Iran's oil exports. And they depend on the Arab producers in the gulf for much of the other 40 percent.
Europe is pretty much in the same boat. But opposition to the U.S.-led boycott of Iran oil has receded since U.S. President Barack Obama gave his approval Dec. 25 to hitting Iran's central bank. The 27-member European Union is expected to sign up Jan. 30.
That could be when the trouble is likely to start.
The oil weapon was first employed in 1967, shortly after eruption of the Six-Day War between Israel and its Arab foes.
As the Jewish state pulverized its adversaries with pre-emptive airstrikes, Arab oil producers stopped selling crude to the United States and Britain because they backed Israel.
But that proved ineffective because the Soviet Union stepped into fill the supply gap.
Saudi Arabia, which spearheaded the 1973 oil boycott following the Middle East October War seeking to force Israel to quit Arab land conquered in 1967, says it will increase its production to make up any Iranian shortfall.
But any shutdown of the Strait of Hormuz would cut off oil exports from Saudi Arabia and its gulf allies as well.
Who's going to blink first?