The International Energy Agency said Europe could “cope” with a supply shortage brought on by a drop in imports of crude from Iran, but that prices might temporarily reach near the $147 a barrel peak of 2008.The chief of large energy firm Vitol told the Financial Times that crude could reach and stay at $150. It is not entirely possible to determine what oil at $140 or $150 would do to the average American household budget, but a look at Census data suggests that the effects would be harsh.
The Consumer Expenditure Survey done in 2010 showed that the average consumer unit spent $49,067 in 2009. That unit:
includes families, single persons living alone or sharing a household with others but who are financially independent, or two or more persons living together who share expenses.
The budget for these households was very tight. More than $10,000 went to shelter. Another $6,400 went to food. Over $3,100 went to health care. Another $5,500 went to pensions and Social Security. More than $2,700 went to vehicle purchases.
The Census data showed that in 2009, a consumer unit spent more than $3,600 on utilities, which included heating. Another $2,700 was spent on gas and motor oil.
Crude prices averaged approximately $90 a barrel last year, and in late summer they were below $80. Oil prices at $120 would be a 50% rise from the amount around labour Day. At $150, the figure is nearly double.