The world was remarkably resilient to a series of record prices in 2007, but a roughly 30 percent rise since the end of last year, with predictions of more to come, is harder to absorb.

“The key issue is the rate of change. The recent exponential rise is unhealthy for everyone,” a senior executive from a major oil company said. He declined to be named.

On the first trading day of 2008, oil prices hit the US$100 a barrel level, which once seemed unimaginable.

The price topped US$125 a barrel on Friday, making a rise to US$150 probable and to US$200 possible, according to OPEC ministers and investment bankers alike.

“If current conditions continue, reaching a period when oil is supplied at US$200 a barrel is not out of reach,” Iran’s Oil Minister Oil Minister Gholamhossein Nozari said this week.

Investment bank Goldman Sachs said the possibility of US$150 - US$200 a barrel over the next six-to-24 months was “increasingly likely.” The bank was one of the first to point to a triple-digit oil price more than two years ago. Oil at US$200 a barrel would mean roughly US$6.50 a gallon for U.S. gasoline, according to figures from Standard Life. It makes the record US$3.61 U.S. consumers are now paying seem cheap.

Already, the U.S. consumer has begun to retrench.

“I think we’ve reached the point now where we’re starting to see significant responses from consumers,” said Jim Hamilton, professor at the University of California in San Diego, adding oil prices were one of the factors that placed the U.S. economy at the risk of recession.

Whatever pain the U.S. feels, it is less than that endured in Africa, where the benefits of international aid to its non-oil producing countries have been wiped out by increased oil costs, a study by the International Energy Agency found at the end of last year. For emerging economies, an ever bigger burden is financing subsidies their populations consider a birthright.

Major consumer countries like India and China are spending billions of dollars to keep transport costs low, while some smaller players, such as Syria, have decided to stop paying up. For all big business, including oil companies, soaring fuel costs can cut profits.

The main difference from the oil crisis of the mid 1970s is that the world is less energy intensive and better at adapting, but its efforts are beginning to eat into growth as firms scramble to reduce the costs, such as wages, they can contain.

“The speed of adapting to high oil prices has been gathering pace ... and will no doubt intensify if the oil price continues to rise,” said Richard Batty of Standard Life.

“However, higher oil prices on a multi-year view remain a hit to corporate margins.”

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