The situation in Korea is one that should not go unheeded by the international community. Technically, the North is still at war with the South because only a ceasefire agreement was reached in 1953, splitting the jutting piece of land into two – The Communist North and the Capitalist South. It was never followed up with a peace treaty.

But the decision by the North to scrap the armistice has been taken very seriously by Seoul and its Allies. Even the normally supportive China has raised an eyebrow, as has Russia – although they are calling for dialogue rather than confrontation. In recent years, there were various beacons of hope such as the opening of a rail route between the two polarised states and the opening of a business park in the North, managed by the South. It is sad to think that in over 50 years, that was all that was achieved. North Korea first tested a nuclear warhead in 2006, angering the international community. It agreed to give up enrichment and the Yongbyon plant was shut down in July 2007 in return for aid and diplomatic concessions. Reclusive leader Kim Jong-Il meanwhile disappeared off the radar amid reports that he had suffered a stroke. Perhaps not so coincidentally, Mr Kim seems to be returning to public view at a time when North Korea has test launched a number of missiles and detonated another underground nuclear device. Analysts believe he is consolidating national military support before naming a successor.

There have also been warnings of a further increase in tension, including the possibility of a naval clash along the sea border between the two Koreas. The North says a resolution allowing the South and its allies to stop and search shipping for nuclear materials is in itself a declaration of war.

The UN Security Council’s five permanent members as well as Japan and South Korea – are working on a strong resolution condemning North Korea’s actions, including possible punitive measures.

Washington, meanwhile, has accused Pyongyang of “sabre-rattling and bluster and threats”. Tensions are definitely brewing, with Seoul saying it will increase reconnaissance over its northern neighbour. Meanwhile, the US – which still maintains a presence of almost 30,000 troops on the peninsula and the South Korean armed forces have gone up to Watchcon II the second highest level of five-stage combat alerts.

The first issue which is at stake here is that of oil prices. The price of crude was already beginning to stutter upwards yesterday as uncertainty and speculation took hold. The second issue which we must look at is Russia’s stance. Russia still has ties with North Korea despite no longer being a Communist regime. Russia, we must never forget, supplies Europe with a whole lot of gas and this could be used as leverage in the potential conflict.

There is also the issue of China. The Chinese, while normally supportive of North Korea, has in recent years toned itself down, especially now it has opened up somewhat to the international free market. But, there is the question that is Taiwan.

Taiwan is where the former Chinese government – the Kuomintang – fled to following the Communist revolution. To this day, China maintains that it has sovereignty over the island and if any form of conflict is triggered in the Far East, then we could see a bold dash across the sea – with the Red Army (which has been significantly bolstered in recent years) taking control of Taipei’s affairs. All in all, this is not a very good time for the world to be subjected to another conflict – this time with the danger of a rogue state having the capability to set off a nuclear device. The world economy is in tatters, people are jobless and confidence is low – the North Koreans have been used to that for years, we haven’t. One hopes that the right mediators are chosen and that the North backs down. It seems that we have an undeclared war ready to erupt.