International financial expert Brad Setser notes:

If oil — using the price for sweet light crude — stays to $125 a barrel for the rest of the year, the average price of oil over the course of 2008 will be around $115 a barrel. The average 2007 price was around $70 a barrel. The $45 a barrel y/y increase in the average price of oil is equivalent to going from $25 a barrel oil to $70 a barrel oil in a single year. It is a large jump.

It would lead to something like a $650-700 billion transfer of wealth from the oil-importing economies to the major oil-exporting economies.

Alternatively, we could spend $5-6 billion on transit, but no, that wouldn’t be very American dreamish.