Facing yet more brutal sanctions and a tanking economy, the Islamic regime in Iran yesterday attempted a little pre-Halloween scare job on markets by threatening to shut off all its oil exports. “If you continue to add to the sanctions, we will stop our oil exports to the world,” Oil Minister Rostam Qasemi said at a news conference in Dubai. “The lack of Iranian oil in the market would drastically add to the price.” 

Oil markets decided Iran's attempted trick was more of a treat: The price of the benchmark grade fell $1.98 a barrel or 2.3 percent to $86.67, the lowest closing price since July 12. 

Obviously, markets are fickle -- yesterday's drop was probably caused by disappointing earnings reports -- and if Iran really made good on the threat it would cause some price shock. But Iran's leverage is vastly reduced: Thanks to the U.S.-led sanctions, exports have fallen to about 900,000 barrels a day, down from 2.2 million a day at the end of 2011. 

The truth is that if the mullahs really turned off the tap it would be manageable for the world and life-threatening for Iran itself. Oil is the backbone of the economy and makes up about 80 percent the nation's exports. 

While the ostensible reason for Western sanctions is forcing an end to the Iranian nuclear effort, a nifty side effect would be the collapse of the regime itself under domestic pressure. After all, it took only the self-immolation of a struggling Tunisian fruit-seller to utterly transform the Arab world. Reeling from riots over the nation's weakening currency earlier this month, the regime seems to be trying two somewhat opposing tracks: tough talk on oil and uranium enrichment, and looking to negotiate one-on-one with the U.S.

Either way, the right response for the West is to keep increasing the pressure. The Barack Obama administration deserves kudos on the issue, and Mitt Romney was correct to give credit where credit was due in Monday's foreign policy debate. It looks like no matter who wins the U.S. presidential race, Iran's leaders will come out a loser. 

(Tobin Harshaw writes editorials for Bloomberg View. Follow him on Twitter.)