If oil reaches $150 a barrel, it could trigger a global recession, the boss of the world's largest asset manager has warned.

Blackrock chief executive Larry Fink said that if the Iran war keeps energy prices persistently high, it will have ‘profound implications’ for the world economy.

The closure of the Strait of Hormuz, which carries about one-fifth of the world's gas and crude supply, has pushed Brent crude prices to their highest levels in nearly four years - at one point reaching nearly $120 a barrel.

Europe risks fuel shortages as soon as next month, according to Wael Sawan, the boss of Shell, with the global oil and gas squeeze already forcing parts of Asia to cut energy consumption - producing a 'ripple effect' that will spread west within a matter of days. 

Economists have warned that recession and stagflation -  the combination of higher inflation and unemployment, and stagnating growth - risks are rising because of the war. 

Fink said it was too early to determine the outcome of the conflict, but told the BBC there were two possible scenarios.

If the conflict ends soon, then oil prices could return to their pre-conflict level at around $70.

But If the war is drawn out, Fink says there could be ‘years of above $100, closer to $150 oil, which has profound implications in the economy’ and an outcome of ‘a probably stark and steep recession’. 

On Monday, Donald Trump said he had had ‘constructive’ talks with Iran, which brought Brent crude prices down 10 per cent to around $100. 

But the Iranian military has denied that a peace process is taking place, with a spokesman insisting that the US is 'negotiating with itself', adding: 'Someone like us will never come to terms with someone like you.'

While Trump may want to de-escalate the conflict to stabilise energy prices, prices are still hovering at $100 as markets grow increasingly unconvinced the war will end soon. 

'If there is a cessation of war, and yet Iran remains a threat, a threat to trade, a threat to the Strait of Hormuz, a threat to this peaceful coexistence of the GCC region, then I would argue that we could have years of above $100 closer to $150 oil which has profound implications in the economy,' Fink said.

'We will have global recession,' he added, when asked if oil stays at $150 a barrel.

The conflict has caused wild swings in markets, as investors grapple with the ramifications for global supply chains. 

Last week, Deutsche Bank said: 'Investors are increasingly pricing in a more protracted conflict that causes extensive economic damage'. 

The longer there is disruption to shipping routes and energy infrastructure across the region, the less likely the damage is temporary.  

The outlook hasn't been helped by comments made by the International Energy Agency (IEA), which has called the conflict the 'largest supply disruption in the history of the global oil market'. 

On Monday, Fatih Birol, the IEA's executive director, said that hat the severe damage to at least 40 energy sites meant that even an end to the conflict would not immediately restore oil supply.

Rising oil and gas prices will soon start to filter through to household energy bills because the UK relies on imports. 

Fink said ‘Rising energy prices is a very regressive tax. It affects the poor more than the wealthy.’

Energy experts have called on the Government to allow the domestic production of oil and gas or risk further price shocks.

Fink said countries should not rely on one source of energy, and that if oil prices rise to $150 ‘you would have so many countries moving so rapidly towards solar and maybe even wind’.

He added: ‘Use what you have unquestionably, but also aggressively move towards alternative sources too.’

This is a developing story