Oil prices are still below the levels that would represent a serious threat to the global economic recovery. But even now Europe is significantly more vulnerable than the US, despite the higher sensitivity of the price of lowly-taxed US gasoline to what happens to the cost of crude. The greater vulnerability of Europe is only partly due to the (potential) disruption to Iranian oil exports. Instead, the key risks are the relative fragility of the economic recovery in Europe, the higher costs of oil when priced in European currencies, and the lack of a significant offset from cheaper natural gas.