While much attention has been given to the costs of preventive military action against Iran, a new report by the Bipartisan Policy Center shows that, over time, “gasoline prices could increase by more than 70 percent,” sending America “into a severe recession” and costing the country “more than five million” jobs.

“If any of the conflicts or energy disruptions that become more likely from a nuclear Iran actually occur, the energy impact and economic consequences would be more severe,” the report states. “Inflation could skyrocket to almost 5 percent,” leading to widespread job loss.

Authored by a team of former military leaders, economists, and lawmakers, the report examines a handful of scenarios that could result if Iran is permitted to obtain a nuclear weapon. In each outcome, oil and gasoline prices increase exponentially.

“Inaction also poses economic risks,” former Democratic Sen. Charles Robb (Va.) told a group of reporters Wednesday during a discussion about the report. “Heightened expectation … and instability triggered by the consequences of a nuclear Iran would cause the price of oil to go much higher and remain high … significantly impacting the US economy.”

Economic outcomes, while difficult to predict, are critical to the debate over whether America should use military action to prevent Iran from achieving a nuclear weapon, the authors said.

“We think that the expectation alone of instability and conflict that a nuclear Iran could trigger … could increase the price of oil,” Michael Makovsky, director of the Bipartisan Policy Center’s Foreign Policy Project, told the audience.

In the short term, the price of a barrel of oil could surge by $11 to $27 dollars after Iran announces it has a working nuclear bomb, the report states.

“The expectation of instability and conflict that a nuclear Iran” poses would quickly lead to a 10 to 25 percent jump in global oil prices, or $11 to $27 dollars more per barrel.

Prices would increase the longer Iran threatens the greater Middle East with nuclear warfare and may lead to the loss of nearly 1 million jobs in the U.S., the report states.

“As instability and tensions remain high, so will prices, even rising, during the next several years, reaching levels of as much as 30 to 50 percent, or $30 to $55 per barrel, higher,” the report states. “Within three years, U.S. gasoline prices could increase by over 30 percent, which equates to roughly paying an additional $1.40 per gallon at the pump.”

Due to the massive price increase, “both inflation and unemployment would be projected to rise by 1 percent, which equates to a loss of more than one million jobs,” the report says.

Further tensions, such as those between Iran and Saudi Arabia—one of the world’s largest producers of oil—could only exacerbate the economic woes.

“There’s an ongoing competition between the Iranians and the Saudis,” said Dennis Ross, a former Middle East adviser to President Obama. “The Saudis have made it clear: If the Iranian acquire this weapon, they will.”

A nuclear arms race or even potential conflict “would create a new reality in the region,” Ross said, creating the “potential for much greater disruption down the road.

A nuclear-armed Iran could easily disrupt the flow of oil in a region that provides nearly 20 percent of the world’s daily oil supply.

By plugging the Strait of Hormuz, a vital shipping lane, oil producing countries like Saudi Arabia would be unable to circulate their product.

“If oil production or exports from the region are interrupted, the rest of the world would have an extremely difficult time replacing those supplies,” the report states.

“It’s hard to imagine Iran with nuclear weapons behaving more responsibly than they are today,” said Ross, who explained that the regime would use the weapon as “a shield by which they can engage in a higher degree of coercing and their proxies can engage in a higher degree of coercion.”

“You run a pretty high risk once you have Iran with nuclear weapons,” he said.

Supply disruptions would not be the only outcome, however. Even the notion of a nuclear Iran is enough to stimulate oil prices.

“Our analysis suggests that a nuclear Iran would heighten expectation of potential future disruptions, which should translate, if understood properly, into an increased risk premium added onto oil prices for as long as the concerns and tensions remain,” the report states. “In other words, anticipation of future energy oil disruption would be priced into the market, leading to higher oil and gasoline prices.”

A known sponsor of terrorism across the globe, Iran would only increase its terrorist activities if it constructs a bomb, the report argues.

“Greater Iranian influence in the region” would embolden “Iranian-sponsored terrorist groups, such as Hezbollah,” possibly leading to “the further spread of radical Islamism and anti-Americanism in an already tumultuous region.”

It also would reduce the “chance for Arab-Israeli peace” and prompt “greater military deployments to the region that American taxpayers will need to fund to try to deter Iranian aggression,” according to the report.

CARL QUINTANILLA: Let’s first get some of the process out of the way. Obviously, the president’s going to need some of this to come from Congress. Is the appetite there for Congress to give him what he’s asking for on this front.

MICHAEL DUNN: It’s an election year, Carl, so I don’t imagine Congress is going to be doing much. There’s a lot of speculation if there is a lame duck session that a lot of things would break out at that time. But I think some of the things that he was asking for, certainly as far as providing additional finance and resources to the CFTC, to monitor the market, to find out what’s actually happening is extremely important and that shouldn’t be a Democrat or Republican issue. It bodes everyone well if they’re working off of good data. The increase in—

QUINTANILLA: The number of surveillance personnel, right?  The increase–increasing the penalties?

DUNN: Increasing the penalties, you know, a lot of times you wonder when you’re in the enforcement business, does somebody just figure in the cost of doing business what the penalty might be, going from 1 million up to $10 million a day per violation is certainly a deterrent, but a million dollars a day is a deterrent as well. I think the fact that the Department of Justice was standing there which says there may be criminal activities involved that they’re looking at, if there are those things, I think everybody wants them out of the marketplace. Those four traders, they don’t want to have somebody have an unfair advantage because they’re breaking a law. Now, having said that, we have got to be able to prove somebody is breaking the law, and they don’t have that type of overview and surveillance.

QUINTANILLA: Do you believe that the kind of behavior he’s describing is responsible for a significant rise in the price of gas in this country, say, over the past year?

DUNN: Well, I’m not privy, too, since I’ve been out of the commission since October of 2011, but the whole time I was there, I never saw any empirical data that said speculators were responsible for an increase or a spike in fuel cost.

KERNEN:  What is the number for the SPR, senator? We had Huntsman saying we should do the SPR $1.08. I was like, $1.08? We didn’t do it at 150, did we?

SCHUMER: No, the SPR is not as good a solution as the Saudi solution for a couple of reasons. First, it’s limited. The Saudis could produce an additional 2.8 million barrels of oil, way on into the future. The SPR is somewhat limited and the SPR works better when there’s an immediate crisis caused by a natural disaster, a Katrina or something like that. It’s something that I would look at if the Saudis absolutely said no, but it’s not close to as good a solution as this.

Despite opposition from some Democrats like Schumer, left-wing think tanks and some House Democrats are urging President Obama to tap into the SPR.

The European Commission said last week that the bloc would not be short of oil if Iran stopped crude exports, as they have enough in stock to meet their needs for around 120 days.

Industry sources told Reuters on February 16 that Iran’s top oil buyers in Europe were making substantial cuts in supply months in advance of European Union sanctions, reducing flows to the continent in March by more than a third – or over 300,000 barrels daily.

France’s Total has already stopped buying Iran’s crude, which is subject to fresh EU embargoes. Market sources said Royal Dutch Shell has scaled back sharply.

Among European nations, debt-ridden Greece is most exposed to Iranian oil disruption.

O’REILLY: You know this, it depends on the economy. If gas prices are at 6 dollars a gallon you could get elected. Alright? C’mon. Obama’s got problems on all fronts.

The AP reports:

Analysts [say] fears of a disruption in oil supplies were a result of expectations that Iranian President Mahmoud Ahmadinejad will unveil new nuclear projects shortly. The U.S. and its allies accuse Iran of seeking nuclear weapons, a charge Tehran denies.

“I think the market is grappling between the softer demand outlook versus this … situation we are seeing in the Middle East,” said Natalie Robertson, a commodities analyst at ANZ Banking Group in Melbourne, Australia.

Also sending supply concerns higher was a vigorous spat between Israel and Iran following a bomb attack on an Israeli diplomatic target in India and a foiled attack in Georgia, said Robertson.