Iran, on Tuesday, took a stance, which if perpetuated, has serious implications for oil prices in 2012. In response to the West, led by the United States, imposing sanctions against Iran including limiting the amount of oil the Middle Eastern country can export, Iran has threatened to cut off the movement of Arabian oil through its Hormuz Strait.

Iran's first Vice President Mohammad Reza Rahimi was reported as saying that if Iran oil export is banned "not a single drop of oil will pass through Hormuz Strait." As a result of Iran's threat, oil prices jumped by two percent on Tuesday to over a $100 per barrel.

According to reports, over 15 million barrels of oil a day passed through the strait in 2009, about a sixth of the world's total oil production and a third of all oil traded worldwide. Most of the oil passing through the strait goes to Asia, not the U.S., but because oil is a globally traded commodity, a shortage in Asia would still affect the global price of oil. Indicative of the seriousness of Iran's threat, are reports that that country's navy is policing the Hormuz Strait.

Iran is the world's third-largest oil exporter with 2.2 million barrels daily, but last month the Obama administration said Iran's central bank, through which the Iranians negotiate their oil transactions, was a threat, which some interpret as an attempt by the U.S. to cut off Iran's oil exports.

However, the U.S.-led threat has serious implications. A CNN Money report said Investment bank Merrill Lynch predicts a $40 rise in oil prices if Iran's exports are shut off completely, and prices could rise much higher if Iran tries to disrupt oil tanker traffic flowing through the strait. But some international analysts believe that if Iran were to try to disrupt oil passing through the strait, it wouldn't be long lasting, as a strong fleet of foreign ships could outmaneuver Iran's navy, allowing oil tankers to pass through. Still, the situation is tense in terms of potential international conflict and the potential impact on world oil prices in a fragile global economy.