“Rising oil prices are emerging once again as a threat to the U.S. economic recovery just as it appears to be gaining momentum.”  That’s the lead sentence in today’s front page WSJ article, “Oil Price Rise Imperils Budding Recovery.”

Reporters Ben Casselman and Conor Dougherty report that:  “Oil prices have climbed sharply in recent weeks as mounting tension with Iran has raised the threat of a disruption in global supplies. On Wednesday, oil futures on the New York Mercantile Exchange rose $1.06 to $101.80 a barrel on reports that Iran had cut off sales to six European countries in response to the European Union’s newly stepped-up sanctions. Iran’s oil ministry later denied the report.”

Whether the minister’s denials are true or not, the market will as the market wills — and in this case we are in for a rocky road ahead.  As this page discussed earlier in the week, gasoline prices are stuck on high weeks before the annual bump in prices caused by refineries switching over to summer blends in many areas.  It is not unlikely that $4 or $5 gasoline will be common by late spring.  Imagine a black swan event on top of that and we will be in a world of hurt.

As it stands, Casselman and Dougherty sound an ominous (and oft-heard warning):

“Pricier oil comes at a delicate time. The job market has begun showing signs of life, and other economic indicators are pointing toward stronger growth. But the recovery remains too halting to easily absorb the shock of sharply costlier oil. . . . Some economists fear a repeat of last year, when the economy appeared to be gaining strength only to stall when oil prices spiked because of turmoil in Libya.”

What’s it going to take for serious congressional action on energy security?

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