Iran's recent threat to block the Straight of Hormuz, if carried out, could more than double current crude oil prices, putting a strain on process and other manufacturers, according to a report released today by the Manufacturers Alliance for Productivity and Innovation (MAPI).

"Sustained closure of the strait, while unlikely, would have a huge impact on the price of oil," said the report's author and MAPI Economist Donald A. Norman. Norman estimated that a sustain closure could push the price of crude oil from $100 per barrel to as high as $480 per barrel, an increase that would exceed what was seen following the 1973 Arab oil embargo.

Such a jump would likely throw the fragile Eurozone economies into a deep recession and significantly increase costs for all manufacturers, reported Norman. The US could be forced to dip into its Strategic Petroleum Reserve.

Nearly 17 million barrels of oil per day, or 19% of the world's consumption, flows through the Strait of Hormuz. Iran has indirectly threatened to close the Strait in retaliation for sanctions imposed by the US and other countries.

Has your company's global risk assessment been adjusted to take a possible sudden spike in oil prices into account? What can your company do to offset sudden rises in oil prices if they come?