The significant difference between the rise in the current rise in the price of oil and other such highs (eg early 1980s) is that there is no single external shock that is driving the price up. The increases are fueled (no pun intended) by several factors:
- speculation to the upside bases on emerging demand issues especially from large, developing countries (eg China)
- speculation of some event that will affect oil production
- Real supply vs. Demand factors (long term and short term, eg seasonal changes in demand, popularity of gas-guzzlers, real demand in countries like china)
The reason this rise is manageable is because it is not volatile. Like inflation, rising or dropping prices are manageable when they are predictable. That is, high inflation is ok if you know that its going to be high. Volatility and shocks are problematic. The market has basically priced in a fairly large shock already, which would lessen the effect if there were an actual shock.