I put “real” in scare quotes because, of course, the actual real price of oil is what is being paid for it today.
That said, here’s my take on all the burdens, with price, a barrel of oil carries in the way of overhead.
• Speculation — $15
• Dollar inflation — $10
• Iraq invasion premium — $10
• U.S. military oil use in Iraq — $5
• Iran-related instability — $10
• Instability in Nigeria, etc. — $5
That’s a total of $55/bbl, which would give us a price of $85 a barrel, otherwise.
Of that, we can pin about half that on Bush’s invasion of Iraq. Obviously, we have $15 directly related. I’ll add $5 each from Iran instability and speculation, and another $5 as negative feedback from that to dollar inflation. That makes $25 as a broader-market war premium.
That said, the other $10 of speculation money is legitimate, if you’re a speculator. It’s largely based on Peak Oil fears gaining broader acceptance, despite the efforts of traditional Big Oil and part of OPEC to sweep that under the rug.
And, speaking of that, to look at things from the demand side, speculators are exactly right, also.
Kevin Drum somewhat trumpets a relatively minuscule 2 percent drop in highway miles, albeit while admitting it’s just a drop.
And, that’s the whole point. The American public is comfortable with the denialism of American political leaders and oil companies on Peak Oil. As for the latter part of the equation, it’s easier to blame Big Oil conspiracies (even if ExxonMobil is selling all of its gas stations), or now, the conspiracy of speculators, rather than admitting that worldwide discovery and production of halfway easy oil has definitely peaked.
In other words, the small minority of Americans who have actually heard more than two sentences about Peak Oil and tried to listen for more than 2 minutes have stopped listening soon enough thereafter, for the most part.
The sheeple want Washington leaders, above all a president who, as their “civic religion” leader, will soothe them with anodyne, rather than, like Jesus or an Old Testament prophet, actually challenge their complacency and self-delusion.
Call it a spin-off of American exceptionalism.