It's incredibly frustrating to fork over hundreds of dollars a month for gas. Being addicted to gas is not fun. There's no way out - you can't live without it. You can put it off for a day, hoping the price will go down and you can drive miles searching for the best dealer, but in the end, you have to get gas.
A side effect of that addiction is a heightened sense of Middle East sociopolitical awareness for most Americans. Recently, we saw the significant impact of the Arab Spring in Libya on the price of oil. This was quite interesting because Libya has a relatively small share of world oil production. We're so addicted, though, that we use it as fast as our dealers can produce it.
And then we "lost" a drone in Iran.
They we're not impressed. And, as they do from time to time brought out the threat of blocking the Strait of Hormuz. Now, I had heard of this threat but looked a little further into the potential implication of having the straight closed.
It turns out, more than 40% of oil shipped by tanker in the world passes through the straight of Hormuz. That means 15 million barrels per day - give or take a few.
Looking back at my post on oil production by country we see that that can be thought of as Saudi Arabia and Iran going off line at the same time. That's the number two and four producer in the world. Libya is about 17th.
So unfortunately that couple hundred dollars a month could look very cheap in 2012.
And that's not fun to think about.