Tags: Iran-Fueled Oil-Price Spike Biggest Threat to Economy | CNNMoney Poll Finds

Iran-Fueled Oil-Price Spike Biggest Threat to Economy, CNNMoney Poll Finds

Wednesday, 11 April 2012 08:30 AM

Spikes in fuel prices stemming from any escalation in the standoff with Iran would threaten the U.S. economy more than anything else, a CNNMoney poll finds.

The European debt crisis, political gridlocks in Washington and a slowdown in China all pose less of a threat than Iran, the poll of 18 economists finds.

"An Iranian disruption of oil supplies could send oil prices to $200 a barrel," says Lynn Reaser, chief economist at the Fermanian Business & Economic Institute, according to CNNMoney.

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U.S. crude oil futures are currently trading over $101 a barrel, while European crude is trading around $120 a barrel.

"It's something we're really concerned about," says Chris Lafakis, an economist at Moody's Analytics.

"A military confrontation could push prices to $180 a barrel, which would precipitate a recession."

The economy can handle today's oil prices, which have gasoline approaching $4 a barrel, the experts say.

The West accuses Iran of building a nuclear weapons program and has slapped sanctions on the country that are already crimping Iranian oil exports.

Worries persist the tensions could escalate into military strikes and the closure of the Strait of Hormuz, a narrow waterway connecting oil-rich Persian Gulf countries with the world.

Such a scenario is not likely but does pose the biggest threat.

"Out of all the things that could derail the economy, that has the highest probability of actually occurring," says Lafakis.

Representatives from the U.S., the U.K., France, Germany, Russia and China are set to meet with Iranian delegates to discuss ways to end the geopolitical tensions that have been bolstering oil's recent price hikes.

While Iran is willing to discuss its nuclear program, which the county insists is for peaceful energy purposes, the West wants information on the country's alleged uranium-enrichment program.

Still, oil market eased on news that the Iranians are willing to talk.

"Iran's representatives will participate in the negotiations with new initiatives and we hope that the [six] countries will also enter talks with constructive approaches," the head of Iran's Supreme National Security Council, Saeed Jalili, tells the English-language news network Press TV, as reported by Reuters.

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