There has been talk for awhile now about the possibility of a global recession, given the poor economic climates of countries like Portugal, Ireland, Greece, and Spain. With recent raises in oil prices, it seems that we are just waiting for the first domino to fall and take down the global economy.
Europe is struggling the most right now, as crude oil reached an all-time high of 93.60 euros per barrel this week. They currently import oil from Iran, as part of an attempt to prevent the development of nuclear weapons. David Hufton, from the oil brokerage PVM, claims that "The West's determination to prevent Iran acquiring nuclear weapons is coming at a price - a price that might include a second global recession triggered by an oil shock."
To make matters worse, Israel has refused to rule out the possibility of launching a strike at Iran's nuclear facilities. The consequences of this, combined with the loss of supply from three mid-sized producers (Syria, Yemin, and South Sudan), could be spikes in oil prices as high as $150 a barrel. This would exceed the all-time high of $147, reached in 2008. Could these prices be enough to send the U.S. and Europe into a recession?
Source: http://www.reuters.com/article/2012/02/26/us-oil-recession-idUSTRE81P0JA20120226?feedType=RSS&feedName=topNews&rpc=71
It definitely doesn't help that the oil industry has key players with such high market powers. This implies that any decision made by one of these oil giants can drastically affect all of the others intertwined in this market, namely affecting our economy and oil prices. Hopefully, it will not be enough to make the United States plunge into another recession.
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