International Monetary Fund chief Christine Lagarde warned earlier this week that oil prices could spike by 30 percent if supplies from Iran were disrupted, which would cause “serious consequences” for the global economy.
“Clearly it would be a shock to economies if there was a major shortage of exports of oil out of Iran; it would certainly drive up prices for a period of time,” Lagarde told reporters.
The stiff sanctions imposed on Iran by the United States and the European Union have caused tensions with Iran, which rejects accusations that it is developing an atomic bomb from their nuclear program.
Iran has threatened to retaliate against the West, including a possible disruption of shipping through the Strait of Hormuz, a busy shipping lane for oil.
Lagarde didn’t directly say that Iran should be left alone to complete their nuclear program, but her economic prediction would certainly seem to be a warning to back off or suffer the economic consequences.