Welcome to the world of oil at US$70 per barrel. That's if there is no crisis in the Gulf over Iran's nuclear ambitions. If there is, then get ready for US$140 a barrel. Exactly one year ago, the investment bank Goldman Sachs put out a paper suggesting that the 'new range' within which oil prices would fluctuate was US$50-$105 per barrel. (The old range was US$20-$30). The price could surge well past the upper end of the Goldman Sachs range if the United States does launch military strikes against Iran, but it's going up permanently, anyway. Transient events like the Iranian crisis and the political unrest in Nigeria (which has cut that country's exports by a quarter) drive the daily movements in the oil price. But the underlying supply situation is so tight that oil would stay high even if Nigeria turned into Switzerland and Iran opted for unilateral disarmament. 'On production, there is nothing we can do. Opec [the Organisation of Petroleum Exporting Countries] is already producing at maximum output,' said Abdullah al-Attiyah, Qatar's oil minister. Middle-class people buy cars. They also run their air conditioners all summer, take holidays abroad and do other things that have big implications for energy consumption. But above all they buy cars. For the foreseeable future, most of the cars they buy will run on some form of refined oil. The rising demand that drives the oil price up does not come just from the middle-class Americans (and, increasingly, Europeans) who insist on driving enormous sports utility vehicles. It also comes from the huge new middle class of unassuming Chinese, Indian, Russian and Brazilian families who only want a modest family car for the school run and the weekend. Goldman Sachs also predicted last year that, in 20 years' time, there would be more cars in China than in the US - about 200 million of them. Ten years after that, India's car population will also overtake America's. We are heading for a world with 1 billion cars (unless all the wheels fall off first), and that means permanently high oil prices. If the oil price rises gradually from US$70 to US$100 over the next five years, people and governments will start paying serious attention to energy conservation and alternate energy sources (including nuclear). The sooner that happens, the less extreme global warming will be as the century progresses. But if the oil price leaps to US$100 or more in one swift jump, we will have the mother of all recessions: then there will be a desperate shortage of funding for developing alternative sources of energy. A US attack on Iran is not the only threat to oil prices. If the markets should ever collectively decide that we are at 'peak oil' - the point where total global oil production has reached its maximum and begins a long decline - the price would soar out of sight overnight. The oil companies and the governments of Opec reassure us that oil reserves are ample to cover consumption at the current rate of world economic growth for decades to come. But they would say that whether it was true or not - and there is reason to suspect it is not. Never mind the geology. Just consider the fact that, in the years 1985-1990, when Opec's declared reserves grew by a massive 300 billion barrels, no major new oilfields were brought into production. The 'growth' was achieved by recalculating existing reserves. The incentive for exaggeration was provided by Opec's decision to set production quotas in proportion to the total size of each member's reserves. So, over a quarter of the world's total 'proven' oil reserves of 1.1 trillion barrels may be no more than an accounting fiction. The best we can hope for in the coming years, therefore, is a relatively slow and steady rise in the oil price, rather than a steep, fast rise that upsets everybody's apple carts. The party is definitely over. Gwynne Dyer is a London-based independent journalist