With pressures ramping up on Iran over its disputed nuclear program, the Islamic republic is suffering from multiple economic problems such as currency depreciation and rising inflation.

And, the European lawmakers has decided to embargo Iran's oil and oil products, causing experts to worry about the effect of rising oil prices on the world economy.

Let's take a look.

Iran is the second-biggest producer in Organization of Petroleum Exporting Countries (OPEC), behind Saudi Arabia. Nearly 20 percent of the oil exports go to European Union (EU) countries, mainly Italy, Spain and Greece.

But now, the European foreign ministers are pushing for an embargo of oil from Iran.

Major EU importers of Iran's oil, such as Greece, Italy and Spain, have until July 1, when the embargo comes into force, to find alternative oil suppliers.

For Iran, the country's parliament is ready to approve a bill aimed at stopping oil exports to some member states of the EU in response to their bid to embargo Iran's oil exports,

Experts worry that the situation would widen the demand-supply gap in Europe pushed crude prices higher.

SOUNDBITE (ENGLISH) LARRY WHITE, NYU STERN SCHOOL OF BUSINESS
"Europe, a modest increase, not good but not a disaster. A major
increase, up to something like 150 dollars a barrel or higher, there’s
very little energy that's produced within Europe. There's some coal,
but not a lot. And when oil prices go up, the prices of other kinds of
fuels go up as well. So coal would go up in price, uranium goes up in
price, natural gas would probably go up in price, although there seems
to be increasing supplies of natural gas. A modest increase in
petroleum prices – not good for Europe, but not a disaster.  A major
increase, it would be a major further push to push Europe into a more
sustained recession."

On Wednesday, oil prices rose above 99 U.S. dollars a barrel on the New York Mercantile Exchange.

Expert says climbing oil prices may also endanger the slow global economic recovery.

SOUNDBITE (ENGLISH) LARRY WHITE, NYU STERN SCHOOL OF BUSINESS
"A modest increase in the price of petroleum to 90 dollars a barrel,
100 dollars a barrel, we can probably live with that. If it went to
150 as it did briefly in 2008 or even higher than that, then you're
looking at a substantial dislocation."

Meanwhile, the expert says in an election year, higher oil prices are a hot subject in the U.S. as rising prices at the pump affect consumer confidence and trust in the Obama administration's economic course.

SOUNDBITE (ENGLISH) LARRY WHITE, NYU STERN SCHOOL OF BUSINESS
"It affects working class people, they're commuting to work. It affects
middle class people, they're commuting to work. It's an extra tax and
so, it would be one more piece of the story about income distribution
and the diminishing share of aggregate income  that is being gathered
by the middle class."

However, investors and experts are also closely watching rising tensions between EU and Iran.