Oil price spike could threaten global economy - Lagarde

A sudden oil price shock could threaten recovery of a fragile global economy, International Monetary Fund Managing Director Christine Lagarde said Tuesday, underscoring the vulnerability of a world trying to shrug off the ripple effects of the euro zone's sovereign-debt crisis, Fox Business reports.

Brent crude prices for May delivery are ruling at $124.35 a barrel, having retreated from $128 earlier this month. Oil prices had jumped to a record $147 a barrel just before the 2008 global financial crisis worsened.

Last year's Libya crisis has already squeezed global oil supply, and growing tensions between the West and Iran could further add to supply shocks and drive prices higher. Oil prices have risen about 17% so far this year.

Lagarde warned that prices could jump 20% to 30% if Iran's crude exports fall sharply and that it would take some time for other oil exporters as they scramble to adjust global supplies to stabilize the prices.

Any such disruption in oil output will have "serious consequences" for the world economy, she said in a news conference.