gas pricesAmericans have grown used to oil at $100 a barrel and paying more than $3 per gallon for gas at the pump. But don't get too comfy -- the price of filling up is probably going up in 2012.

Uncertainty in the Middle East, growing global demand, and a lack of easy oil will be the drivers behind the price spike, and as we've seen recently, any change in the status quo will send the black gold higher.

1. Countries with Crazy Leaders Produce a Lot of Oil

Crazy leadersIn case you've missed the latest in Iran's continuing nuclear drama, the country is threatening to blockade the Strait of Hormuz if the U.S. follows through on sanctions over its nuclear program.

The Obama administration and many analysts are brushing aside that threat because it would hurt China, a strategic ally of Iran, more than the U.S. But many people think that if Iran is serious, the situation could end in military action. Even this threat of action has supported oil prices in recent days, and it highlights how fragile the Persian Gulf -- and oil price stability -- is right now.

With the U.S. pulling out of Iraq and Libyan oil beginning to flow again, there are relatively few supply disruptions right now. But Iran could change that in just a matter of days.

2. Global Demand is Only Growing

Getty ImagesIn the U.S., demand for oil may not be growing much, if at all. But emerging markets like China, India and Brazil are certainly picking up the slack and increasing their demand.

In November, China imported 32.3% more oil from Saudi Arabia and 76% more from Russia than it did in the previous year. With millions of new vehicles hitting the road in China every year, that trend will continue.

The situation is similar in India, where imports play a huge role. In 2010, India imported about 70% of the oil it consumed, most of which came from the Middle East.

Unless the global economy heads for a recession in 2012, global oil demand will continue to increase and prices will likely rise as a result.

3. Oil is Getting Harder to Find

oil is hard to findOne of the biggest reasons U.S. net petroleum imports have fallen from 60.3% of consumption in 2005 to 45.4% so far in 2011 is that sources of oil have become more unconventional.

Unlike the good old days of Standard Oil, when you could drill a hole and oil would come spurting out, hydraulic fracturing in shale is much more complicated and has only relatively recently become economical.

Kodiak Oil & Gas (KOG), Continental Resources (CLR), and Whiting Petroleum (WLL) are three of the oil companies using this technology to unlock oil in the Bakken shale play in North Dakota and Montana. But it isn't cheap, and these producers need oil prices to remain high to continue their production.

The same goes for ultra-deepwater drilling around the world. Cobalt International (CIE), Statoil (STO), and Total (TOT) are all eagerly anticipating drilling in deep water off the coast of Angola. But the ocean there can be more than a mile deep, and the wells themselves will be drilled more than a mile farther underground -- not a cheap endeavor even if the reserves they find are as large as expected.

The Final Conundrum

Beyond the gas station, the price of oil in 2012 will have a far-reaching impact on the economy. As prices go up, consumer confidence goes down, and we cut back on spending to prepare for bad times. But if prices fall, it could mean we're headed into a recession -- something no one wants right now.

The only silver lining is that the higher prices will also push explorers to expand production domestically and create more jobs. But that's small consolation when you're filling up at the pump.

Motley Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool and check out his personal stock holdings. Motley Fool newsletter services have recommended buying shares of Total and Statoil.




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Mike

Cheap energy IS our economy and until it is cheap again their will be no growth just inflation which is not growth no matter how high the spending increases or how badly libtard Oboma kool aid drinkers want it to be. Oil IS the PRIMARY factor to world prosperity, cut and dry! Oil cost increase caused inflation along with massive fed res dollar printing caused inflation means hyper inflation and the end of the dollar.

January 05 2012 at 6:33 PM Report abuse rate up rate down Reply
kastmaster2105

Is natural gas cheaper to use? I may want to install a 33 gallon LPG tank in my F150....someone figure this for me please...standing by....

January 05 2012 at 4:39 PM Report abuse rate up rate down Reply
kastmaster2105

Damn SPECULATORS......................thats what....thats the MAIN reason gas in high and oil. We have gas to export and still prices are damn high..Their ought to be a law against this speculation Sh****T

January 05 2012 at 4:37 PM Report abuse rate up rate down Reply
jamflwrsjr

Yhea why is the oil prices rising ? = Because of greed and deciption!

January 05 2012 at 9:52 AM Report abuse rate up rate down Reply
John A. Bailo

This is good news for the emerging Hydrogen Economy. I'm all in on H2.

January 04 2012 at 5:16 PM Report abuse rate up rate down Reply
Mike

Coal is our best short term solution. Its super cheap and the US is the world's largest exporter, has been for decades. EPA obstruction based on false science and political libtardism must stop! Colorado University study reports total Emissions from coal fired plants are les than natural gas PER UNIT OF ELECTRICITY PRODUCED. Decreasing demand on natural gas makes ng a viable cheap transportation energy alternative. See what BIG LIBEREAL FEDERALISM GETS YOU? SHEAR STUPIDITY AT THE EXPENSE OF YOUR PROSPERETY!

January 04 2012 at 5:14 PM Report abuse rate up rate down Reply
nconstinc

This is big oil and speculators bulls***t once again! First the worlds economies are in the toilet. For Gods sake look at Europe! Two, China's economy has fallen and that reduced demand. WE do not buy but a spec of oil from Iran. OPEC could increase demand, but why? Its all about greed. The Canadian pipeline is a start. It is not the long term solution BUT maybe the Arabs will get a bit scared and start playing fair with the prices. For those of you that say the pipeline is bad, well Canada is going to sell that iol to someone, and that someone is CHINA! I don't know about you but I think we need relief here and NOW! China already ownes our debt do we really need them to control what could be our oil?

January 04 2012 at 4:43 PM Report abuse rate up rate down Reply
pietrzakjudy

All oil on public lands should be the property of the citizens of the USA.
Not an export commodity.
All leases should be with a $40 per barrel mandate,any oil sold for more than $40 a barrel should have the profit turned over to the US Treasury.

January 04 2012 at 2:13 PM Report abuse rate up rate down Reply
rhs686

Stop buying oil from the middle east, and lets start using Natural Gas.
We have a Huge amount right here in the good old USA.
Enough to last a few hundred years.
We are already using them in Trucks.

January 04 2012 at 1:20 PM Report abuse rate up rate down Reply
1 reply to rhs686's comment
billyjoeobama

T.Boone already has a plan for the whole deal,it will take ten years to get it up and running but not without government subsidies. So yes open your wallet. Some of the money could have come from the money that was wasted on Solyndra and other failed green projects.

January 04 2012 at 2:08 PM Report abuse rate up rate down Reply
hgeorgech

Isn't it amazing that many of those who cry "foul" about rising oil prices just happen to own Oil company stocks .. either as individual stocks or part of mutual funds? Why is it that those folks never complain about the dividends and cap gains they get?

Bottom line: if you're not thrilled by rising gasoline prices, counteract it by investing in it!

January 04 2012 at 6:20 AM Report abuse rate up rate down Reply