The United States economy managed to cope this year despite triple-digit prices for barrels of oil. The lessons may come in handy, economists said, because those prices will probably be sticking around.
With Iran threatening to cut off about a fifth of the world's oil supply by closing the Strait of Hormuz and unrest in Iraq endangering the ability to increase production there, financial analysts said prices for two important oil benchmarks will average from $100 a barrel to $120 a barrel in 2012.
For consumers, who have been driving less and buying more fuel-efficient cars, weakened demand has helped lower gasoline prices 70 cents since May, to a national average of $3.2 for a gallon of regular unleaded, according to the AAA fuel gauge report.
Now, though, the focus has turned to Iran. On Wednesday, Iran and the US sharpened their tone over Iran's vow to close the Strait of Hormuz if Western powers tried to stifle Iran's petroleum exports.
The catalyst for the Iranian threats are new efforts by the US and the European Union (EU) to pressure Iran into ending its nuclear program, which Iran has refused to do despite four rounds of sanctions imposed by the United Nations Security Council.
{{/usCountry}}The catalyst for the Iranian threats are new efforts by the US and the European Union (EU) to pressure Iran into ending its nuclear program, which Iran has refused to do despite four rounds of sanctions imposed by the United Nations Security Council.
{{/usCountry}}Those sanctions have not focused on Iran's oil exports. But in recent weeks, the EU has talked openly of imposing a boycott on Iranian oil, and the US President Barack Obama is preparing to sign legislation that, if fully enforced, could impose harsh penalties on all buyers of Iran's oil, with the aim of severely impeding Iran's ability to sell it.
Habibollah Sayyari, Iran's Naval Commander, said that "closing the Strait of Hormuz is very easy for Iranian naval forces."