Oil is close to a tipping point

The rising price of oil threatens to sink the still-fragile global economy.

It's "dj vu all over again", says Bank of America Merrill Lynch (BAML). Last year, the run-up in oil prices amid the Arab Spring threatened to choke off global growth. This year's oil price surge is another "unambiguous negative".

Oil futures have hit a nine-month high of $126 a barrel, while in euro and sterling terms, black gold is at record peaks of around €94 and £80. The dollar record, set in 2008, is $146. The tight market and the prospect of war between the West and Iran, and the latter's threat to block the Strait of Hormuz, through which a fifth of the world's daily oil supply is shipped, have boosted prices by 17% this year in dollar terms.

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