Is an Oil shock looming?

In 2008 oil prices went up to $147 per barrel, and last year, disruptions in the supply of oil from Libya sent the price of oil rocketing up to $127.

The sharp increase in the price of oil has had a worrying impact on the global economy, and the US as well as Europe has felt the effect.

Oil prices are up around 15% since the beginning of the year and rich-country oil stocks are at a 5-year low. Oil prices rose by 80% at the start of the first Gulf War.

Now that global oil prices are on the rise again, at a time when the financial crisis is only starting to recover, there is more pressure on western governments to act.

Economic sanctions on Iran have the potential to make the situation much worse for the west - but by their own doing.

Iran - a major contributor to the world's oil economy - exports 20% of the world's oil needs. With oil embargoes already on Syria disruption to this supply of oil from Iran could be disastrous for the West.