Global oil prices spike whenever excess global crude production capacity falls below 2 to 3 million barrels per day. The possibility that Iraqi oil supplies (3.3 million barrels per day) could be disrupted by its unfolding civil war has already pushed up the prices of West Texas Intermediate crude (WTI) and Brent North Sea oil. Dramatic oil price increases are associated with global economic slowdowns. So some analysts worry that further disruption in Iraq could drive prices above $120 per barrel and tip the world economy into recession. Yo-yoing Libyan oil production is also not helping to calm petroleum markets. Looking further into the future, political turmoil in other oil-producing countries such as Nigeria, Venezuela, and South Sudan does not bode well for oil price stability.
Oil costing more than $120 per barrel would likely boost gasoline prices in the U.S. above $4 per gallon. Currently, U.S. gasoline prices are near a six-year seasonal high of $3.686 per gallon.