Iran Threatening Global Oil Supply

Gas prices could spike as Iran makes threats to close Hormuz Strait.
2:50 | 12/28/11

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Transcript for Iran Threatening Global Oil Supply
The US is engaged in a global showdown with Iran the running of leveling a threat at the heart of the American economy. Tonight vowing to shut down a key gateway for the world's oil supply. This comes at the end of the year in which Americans have paid more for gasoline than ever before and the US response to Iran is top. Don't even try it so how real is the threat and could -- harm the fragile economic recovery. ABC's Cecilia Vega covering the show down from Washington for us tonight Cecilia. Good evening -- Iran upset that the US is about to impose sanctions over the country's nuclear program is now telling the world that it could easily shut down this vital artery. -- to the oil rich Persian gulf. Any attempt by B Ronnie and to shut down the strategic Strait of Hormuz consensus oil and gas prices sky -- in this country. An astounding 20% of the world's oil travels through that vital waterway just twenty miles wide and right in Iran's backyard. Their navy chief said on Iranian TV today closing the Strait of Hormuz will be easier than drinking a glass of water and if they follow through on that threat experts predict higher prices at the pump. Depending on how long this goes on it and how much is damage or how much is really going to be affected. By summertime we can be -- looking at upwards of five dollars and. And that could have -- profound effect on this nation's already fragile economy. Economists say if prices rose from today's three dollar and 26 cent a gallon average to five dollars. It would -- 218. Billion in consumer spending over a year. Money for things like restaurants vacations and trips to the mall would instead go straight to the gas tank. What I might have to do is stay -- a little bit more often and we're from the phone. Well President Obama is on vacation in Hawaii purposefully keeping quiet on Iran's provocations. US is responding forcefully. US navy vowing -- that any disruption will not be tolerated. This ease concerns in the oil markets but with America and Iran facing off in these troubled waters nothing is certain. If -- -- Iranians actually attempted. To shut down the straits of Hormuz it would almost be like -- please attacked me you know -- it would be an act of war. Even if the street remains open new US sanctions are about to be imposed on countries that treatment Iran. -- sanctions will make it difficult for other countries to fire Ronnie and loyal. Possibly increased gas prices around the world. -- oil prices did not rice today experts are telling us that just the threat alone could be enough to raise gas prices by as much as fifty cents a gallon. -- there will be a big chess game underway in the days ahead thank you Cecilia.

This transcript has been automatically generated and may not be 100% accurate.

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