The market has one thing on its mind this week: How much higher can oil prices climb?

Crude prices have ripped higher all week as the war with Iran continued, sparking concern among investors that there could be serious consequences for the economy if oil stays elevated.

Brent crude, the international benchmark, rose more than 6% to top $90 a barrel on Friday, its highest level since 2024, as investors digested Iran’s recent attack on an oil tanker and Donald Trump’s latest comments signaling the war could drag on.

April contracts for West Texas Intermediate crude, meanwhile, climbed another 7% to $87 a barrel, its highest level since October 2023.

Investors have dumped stocks all this week, panicking as crude is a key input in the outlook for economic activity.

The rise in oil prices has sparked some comparisons to the oil price shocks of the 1970s. Soaring crude prices at the time led to stagflation, a scenario in which inflation soars while the economy remains sluggish.

Market pros are mostly expecting the rise in prices to be short-lived, but are eyeing a few levels that could signal more dire consequences for the US economy.

Here are the thresholds they’re eyeing, and what each level could mean.

$80-$90 a barrel

First, it’s possible that oil prices are already at a level where more serious economic consequences are imminent.

Oil prices breaking “meaningfully” above the $80 mark and staying there for several weeks would start to lift the inflation outlook, Nic Puckrin, a lead market analyst at Coin Bureau, wrote in a note this week.

“If oil surges above $90 and remains elevated as energy infrastructure disruption intensifies, this could quickly become a longer-term structural shift,” Puckrin wrote.

$100 a barrel (+12% upside)

$100 a barrel, or a 12% increase from where Brent traded on Friday, would mark a true oil price shock, according to José Torres, a senior economist at Interactive Brokers.

Should oil prices hit that level, markets can expect to see an inflationary response similar to what happened after Russia invaded Ukraine, he told Business Insider this week, referring to how consumer prices grew as fast as 9% year-over-year in the US alongside a rise in energy prices.

In such a scenario, Torres said he saw inflation rising back up to 3%. The outlook for Fed rate cuts would also be derailed, while the risks of stagflation would increase, he said.

“That’s the risk here. So we can have a down year,” Torres added of the potential impact on stocks.

Mike Wilson, the CIO at Morgan Stanley and a major bull on Wall Street, also said he sees $100 a barrel as the level that could upend his bull case for stocks. That’s largely due to the impact of oil prices on economic growth, he said, citing his team’s analysis of the historical performance of the stock market after a spike in oil prices.

Oil hitting $100 a barrel would push its year-over-year gains to the 75%-100% range, a territory that historically has led stocks to underperform, Morgan Stanley wrote in a client note this week.

“The bear case scenario for stocks related to this past weekend’s events in Iran and across the Middle East would be if oil prices were to rise sharply/persistently, thereby posing a risk to the duration of the business cycle,” Wilson added.

$120 a barrel (+34% upside)

Oil hitting $120 a barrel, a 34% increase from Brent’s current levels, could be the trigger for a US recession, according to Bruce Richards, the CEO of Marathon Asset Management.

Speaking at the Bloomberg Invest conference on Wednesday, Richards pointed to the potential for higher oil prices to create a stagflationary environment.

“$120 for Brent, you’re at zero growth. That’s the trigger for a recession,” Richards said. “That’s what I believe. And I believe that’s what the markets believe, although no one said it yet,” he added.

Nobel economist Paul Krugman also predicted negative consequences if oil prices were to rise to $120 a barrel. A price spike of that magnitude could raise headline inflation figures by about 1 percentage point and raise recession risks, he said.

Krugman said he wasn’t expecting a change in oil prices to spark a recession or “runaway inflation” on its own, but suggested that the risks would be skewed more towards the downside. He pointed to other pressures already weighing on the US economy, like a weaker job market.

“There are many stresses on our economy, and this could be the straw that breaks the camel’s back — a straw that becomes heavier the longer the war goes on,” he wrote in a Substack post this week.