IMF chief Christine Lagarde warned Tuesday, March 20 that crude oil prices may spike by up to 30 percent if Iranian supplies were disrupted, causing “serious consequences” for the global economy, AFP reported.
The standoff between Iran, the world’s second-largest supplier of oil, and the West over the Islamic Republic’s nuclear program is seen as a flashpoint that could sharply increase world crude prices.
“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 in New Delhi, wrapping up a two-day visit.
The International Monetary Fund (IMF) has calculated that an interruption in oil supplies from Iran could increase oil prices by 20 to 30 percent, said Lagarde, who arrived in India at the weekend from neighbouring China.
Iran has repeatedly rejected accusations by Western nations that it is developing an atomic bomb but the United States and the European Union have imposed stiff sanctions to persuade Tehran to abandon its nuclear programme.
Iran has threatened retaliation for tightening Western sanctions over its nuclear programme, including a possible disruption of shipping through the Strait of Hormuz, a Gulf chokepoint for global oil shipments.