The heightened oil market irony seems to be getting out of hands. After a considerably steady journey with 15% YoY rise in January CY12, Brent crude started to escalate in February exceeding $125 per barrel. From how things have unfolded, Iran is taken to be the main reason. US sanctions to curtail Iranian nuclear development, threats by Iran to close the Strait of Hormutz and European Union cutting back on oil imports from Iran have been in the limelight. On the hindsight however, Irans tactics are just one of the fears facing the global oil market as the unplanned consequences of the sanctions and the dispute, like a rather gradual price crawl since the beginning of CY12 have emerged. For one, the prospects of the cushion that US were heavily relying on to curb oil prices are turning sour. Saudi Arabia, which proclaims to own the ability to make up for the oil shortage in emergent situations, loses some credibility when events are rewound to the Libyan crisis, or to the time when oil prices skyrocketed from $25 to $147 in 2008. Secondly, the Arabian land has not been pumping at such high rates before, which is 9.9m b/d in January, as per IEA. With supply disruptions in Syria, Yemen and other parts of Middle East, the country is already supplying 700,000 b/d. On top of this, with Europe and China cutting imports from Iran, the Kingdom is contributing around 500,000 b/d to fill the gap. Furthermore, with clear rising demand from Asia, Saudi Arabia just might be falling short to fill the gap as the spare oil capacity is thinning faster than anticipated. In such circumstances, it will be difficult for the largest oil exporter to put a lid on oil prices. In a crisis situation like this, the Obama administration is under pressure whether to release oil stocks from its strategic petroleum reserves to tone down the global oil market or let gasoline prices soar right ahead of presidential elections 2012. Terror lurches as tight oil markets leave very little room for a fall in prices. Nevertheless, things might not be as spooky as they look, at least not as bad as they were in 2008. With China going soft and exploring alternative sources of energy and some signs easing demand especially in the US, oil price spike to $150 - $200 level sounds unrealistic. Accordingly, Goldman Sachs forecasts oil prices for 2012 to sway between tight supply and the fear of European debt crisis leading to global recession.