Other articles by Michael Janofsky:

Airline cuts: Just about anything goes 9/11 panel calls policies on immigration ineffective Halliburton finds Kuwait kickback, pays U.S. $6.3M

Administrative & Professional
Tucson Urban League
CEO/President Trades/Construction
RANCHO RESORT
MAINTANANCE POSITION Administrative & Professional
Jorgensen Brooks Group
Counselor Mechanical
Komatsu Equipment Co
Resident Field Mechanic Finance and Accounting
Charles E. Gillman Company
Accounting Specialist Sales and Marketing
Everready Glass
Sales Reps

At $250 a barrel for crude oil, food prices double. The U.S., Japan and Europe plunge into deep recession. Companies go bankrupt. Airlines are nationalized. Sport-utility vehicle sales dry up as gasoline tops $7 a gallon.

The scenario may not be unimaginable. Alexei Miller, chief executive officer of OAO Gazprom, the world's biggest natural-gas company, said June 10 that crude will climb to $250 a barrel in the "foreseeable future." Jeff Spittel, an analyst at Natixis Bleichroeder Inc. in New York, says prices may reach that level only after a war or an attack on major oil installations.

While executives, elected leaders and economists disagree on the probability of Miller's vision, there is consensus that the price would jolt everyday life.

"It would be a disaster for all the oil-importing countries, all the democracies and China," says James Woolsey, vice president of consultant Booz Allen & Hamilton Inc. in McLean, Va., and a former CIA director. "And it would be hugely beneficial for the many monarchies and dictatorships that are the main suppliers."

Some investors are already betting on Miller's forecast. At least 3,008 options contracts have been purchased giving holders the right to buy oil at $250 a barrel in December, data compiled by Bloomberg show. The options closed at 64 cents on June 13.

Rising oil costs have been responsible for a third of global food inflation since 2004, according to London-based research firm New Energy Finance.

"At $7-a-gallon gasoline, you're probably looking at food prices almost double," says Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Conn.

At $250, "there would be a massive shutdown of companies," says Carlos Mattei, vice president for glassmaker Vitro SAB in Monterrey, Mexico. "Many of these small companies have to choose between paying the gas bill or payroll."

Some say slowing demand will curb prices. The International Energy Agency, an adviser to 27 oil-consuming nations, cut its forecast of world oil use for a fifth month as record costs dented consumption. The U.S. Energy Information Administration predicts prices will drop to $120 by December 2009.

"Over a decade or more, after you adjust for inflation, if the price doubled, we would expect demand to fall by 30 percent," says Douglas MacIntyre, the agency's senior oil market analyst. U.S. oil consumption fell 5.7 percent from 1973 to 1975 as the Arab oil embargo led to shortages.

Tom Kloza, chief oil analyst for the Oil Price Information Service in Wall, N.J., is skeptical about Miller's prediction because it may benefit Gazprom.

"It's silly to take people with incredibly vested interests as having an unfettered, unbiased opinion," Kloza says.

Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pa., says the firm's economic models break down if the price of oil goes over $200 a barrel.

"The U.S. goes into deep recession, as does most of Europe and Japan, and that takes much of the developing economies with it," he says. "I don't see how we get to $250 because the economy is broken long before that, and demand falls and that causes prices to fall."