Are we headed for a global recession due to the Ukraine war?

WTI Crude is down nearly 10% from its recent high after the International Energy Agency said it can “bring more oil to the markets” to capture the Russia-driven surge in oil prices. The iShares US Oil & Gas Exploration & Production ETF slid 3.0% on Wednesday.

Oil prices could go up another $30 a barrel

Nonetheless, the U.S. crude oil still stands about 60% above the price at which it started the year. Still, industry expert Andy Lipow says prices could jump another $20 to $30 a barrel. On CNBC’s “Squawk Box Asia”, he said:

The market is pricing in a 2 to 3 million barrel a day shortfall. Of course, if Russia ultimately bans the sale of oil into Europe, which is a total of 4 to 4.5 million barrels a day, we can easily go another $20 to $30 a barrel higher. So, $150 a barrel is a possibility.

The news comes a day after the U.S. banned all imports of Russian oil and gas that Putin dubbed a declaration of economic war against his country. The Russian President signed an order to ban some Russian exports on Wednesday.

Lipow sees a real risk of recession

According to the President of Lipow Oil Associates, if oil prices remain at elevated levels, it can push the world into a recession, much like it did in the global financial crisis of 2008. He noted:

If there’s no action, the only way to solve the problem is to have higher prices cause demand destruction around the world. My greatest fear is that oil prices have risen so fast that it can cause a recession in Europe and Latin America that rolls on into the U.S.

Also on Wednesday, the President of Lithuania said if Russia is not stopped in Ukraine, it could trigger the World War III.