OPEC President Chakib Khelil, Algeria’s energy minister, warned Monday that oil prices could hit US$200 a barrel. He blamed not only the weak US dollar, but also growing geopolitical tensions, the latter of which have played an undeniable role in causing the price of oil to reach historic levels. These tensions are tied to anxiety over events in the Middle East, principally terrorism and Iran.

Indeed, some analysts believe recent spikes in the cost of a barrel of oil can be tied to jitters over Iran in particular.

Meanwhile, European Union states have begun to re-review their strategic oil reserves policy. "The risk of supply disruptions is increasing. Supply is more and more concentrated in a handful of countries, many of which are exposed to high geopolitical risks," the European Commission wrote in a paper asking EU member states, non-governmental organizations and industry representatives to suggest how the bloc should deal with energy reserves in the future.

In the US today, soaring gas prices tops the list of economic woes facing families, according to a survey on how changes in the economy are affecting people's lives. And no wonder. The price of a barrel of oil has risen from $25 to over $100 in just four years. Or, put another way, a yearly increase in cost to consumers of more than $300 billion.

About 44 percent of survey participants said the cost of gasoline was a "serious problem" for them. Across all income levels, the cost of gas was the most frequently cited economic concern.

More than a quarter of households earning more than $75,000 a year described paying for gasoline as a serious problem. For those with incomes of less than $30,000, about 63 percent felt that way.

The federal Energy Information Administration predicted that the average monthly national price of gasoline will peak at $3.60 this spring, but warned $4 spikes also are possible. There’s no doubt that the increased cost of fuel is taking its toll on the US economy. The Consumer Price Index published by the Department of Labor rose 4 percent during the past year, with energy costs increasing at a 17 percent annual rate and transportation costs at 8.2 percent.

The US alone consumes 25 percent of the world's oil, or 21 million barrels a day. By 2030, petro demand in the US is expected to grow by 30 percent - 27 million barrels per day.

There’s little doubt that the secure flow of oil is more vital to the world today than ever before. But this security also is now more tenuous than it’s ever been. Any fluctuation in security – or even perceived security - can cause prices to surge one way or the other.

For example, the announcement by British Petroleum that it has restarted an important North Sea oil pipeline caused crude prices to drop more than $3 a barrel, the biggest decline in four weeks.

“ …This continued instability - and in some cases, hostility - in some of the world's most prolific oil-producing nations, and the conclusion is clear: America's dependence on oil, particularly oil from unstable and undemocratic parts of the world, threatens national security and economic stability,” wrote Graham Allison, director of the Belfer Center for Science and International Affairs at the Harvard Kennedy School, and Robbie Diamond, founder and president of Securing America's Future Energy (SAFE), in an Op-Ed.

Allison and Diamond referred to a recent exercise by a group of former high-level government officials involving “a high-tech, realistic simulation exercise based on an all-too-possible scenario: A series of geopolitical events leading to a sudden and sustained jump in the price of oil.”

“The simulation illustrates how one small event in one corner of the world can cascade through the entire global supply system. Courses of action, at that point, would be limited,” Allison and Diamond pointed out. “Would Americans accept an emergency restriction on driving, rationing, or forced carpools? Would we have to deplete our strategic stores, which are held in reserve largely for extreme contingencies, including military shortages? Would we be willing to send troops to secure oil facilities abroad? Would we have to bow to the demands of nations like Iran and Venezuela?”

“This is not just the stuff of Tom Clancy,” wrote Allison and Diamond, “these are scenarios we may have to one day face if we continue down our current path. None of them is palatable, and none is even guaranteed to work. Once the crisis occurs, it is already too late.”

While detrimental actions by state oil players like Iran and Venezuela, and, increasingly, Russia and Nigeria, can have a serious impact on petro flows and pricing, terrorism remains the wild card that could have a much more serious impact, up to and potentially including the toppling of supplies and markets, as we reported in, “Petrojihad: Bin Laden and the Oil Weapon.”

We also reported on the dramatic consequences of a successful terrorist attack in the US on just one terribly important – and terribly unsecured - North American oil infrastructure facility. The attack could potentially cause a cascading catastrophic shock to the entire global oil economy.

In the Oil ShockWave exercise referred to by Allison and Diamond, the crisis began with a terrorist attack that forced the closure of the Bosporus Strait of Turkey. Without this vital shipping lane, more than two million barrels of oil a day were cut off from the world market during peak winter demand. The situation grew worse as terrorists in the Persian Gulf began to target oil infrastructure and Western workers there. As a result of these attacks, oil prices shot up to $160 a barrel, and gasoline in the United States topped $5 a gallon.

"Tonight's simulation made clear the importance of getting beyond sound bites and parochial interests and taking comprehensive action to limit our energy security vulnerabilities," said Diamond following the Oil ShockWave exercise. "There are no short-term solutions; once a crisis occurs, America's hands are tied."

SAFE and the Belfer Center for Science and International Affairs at the Harvard Kennedy School jointly conducted Oil ShockWave.

The simulation was led by former Treasury Secretary Robert E. Rubin. Other participants included former Treasury Secretary Lawrence H. Summers, former Congressman Phil Sharp, former White House Press Secretary Joe Lockhart, former Deputy National Security Advisor Meghan O'Sullivan, former Assistant Secretary of Defense for International Security Policy Ashton Carter, and former Executive Director of the President's Foreign Intelligence Advisory Board, Joan Dempsey.

“Real-world events underscore the nation's acute energy security vulnerabilities. Over the last year oil prices have surged in a short period of time without any single precipitating event. The effects are stark. Every $10 increase in the annual price of a barrel of oil costs the economy $75 billion,” Allison and Diamond wrote.

Rather than discharging their partisan notions and start working together on a real-world pragmatic national security-focused oil security agenda, the Bush administration and Democrats – and even some Grand Old Party members themselves – are instead bickering over insignificant things like whether recent purchases for the Strategic Petroleum Reserve have driven up oil prices by as much as 10 percent. The reserve is crucial to national security and the relative small purchases historically have had little impact on world oil prices.

Meanwhile, US refining capacity is an aging, maintenance-ridden 40 percent less than what it was almost 30 years ago. The transportation infrastructure for crude and petro products needs updating and vital infrastructure needs better protection.

Ironically, the increased price of oil has resulted in increased drilling for oil and natural gas in the US. Today there’s more drilling occurring than there was at the height of the last production boom in the late 70’s and early 80’s. But much of this activity is in places that would have been produced had the last boom not collapsed.

New fields still aren’t being tapped, like the more than 100 billion barrels of oil that’s estimated under the Outer Continental Shelf, other potential offshore locations and the Arctic National Wildlife Refuge in Alaska. While producing these areas probably wouldn’t have much of an impact on oil or gas prices in the near term, this production would aid national petro-security, as would opening other areas to exploration and production.

Tapping the Arctic National Wildlife Refuge and offshore reservoirs could indeed have a “huge impact” on US energy security, said Michael Economides, a professor of engineering at University of Houston, in his keynote address to the 16th annual Williston Basin Petroleum Conference.

Just increasing domestic oil production by 10 percent would go a long way to improving national oil security, Economides said, adding, it also would advertise to “our would-be enemies that we mean business.”

Encouraging and providing incentives for new technologies and processes to recover previously unobtainable oil from the depths of plugged, abandoned and idled production sites could also help restore a not insignificant petro stream, as would encourging more exploration in general. New finds are being made, like the Bakken formation in North Dakota which is estimated to contain between 2 billion and 4 billion barrels of oil.

And ... securing for production – and possible new exploration – Iraq’s now largely unproductive oil fields. Iraq’s oil ministry said Tuesday that the country has failed to attract foreign investment due to persistent terrorist activity.  About 65 percent of Iraq’s oil pipelines are offline because of sabotage and lack of repairs.

A new survey from Public Agenda and Foreign Affairs found most Americans believe US dependence on foreign oil is a major national security concern.

The sixth edition of the Confidence in Foreign Policy Index found about 60 percent of Americans believe reducing energy dependence will strengthen national security "a great deal."

"The most important takeaway for leaders is this: The public's concerns about energy policy aren't limited to rising gas prices. Americans are connecting energy policy to national security issues in ways that they didn't just a few years ago," said Public Agenda Chairman Daniel Yankelovich.

But until the US comes up with an actionable oil security game plan, it will continue to be a hair trigger away from a debilitating shortage and cost.