How America’s foes have us ”over a barrel”

The United States does not buy oil directly from Iran. But the disappearance of Iran’s 2.5 million barrels per day from the world’s oil markets would be felt acutely in the United States, probably costing 1 million jobs, according to Orde Kittrie, a former State Department official who teaches economics and international law at Arizona State University. “America’s enemies literally have us over a barrel,” he says.

Experts say that within the context of what Americans really pay for oil, significant new investments in alternatives begin to make sense. One recent study by the National Defense Council Foundation, a nonprofit think tank in Alexandria, Va., estimated that Americans pay $8.36 per gallon, far more than the actual pump price of gasoline, for such indirect costs as maintaining a military capability to keep oil flowing from the Persian Gulf and the opportunity costs of sending money to foreign suppliers rather than spending it at home.

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