Inflation is only one reason U.S. consumers find the burden more bearable than in the '80s.
Oil at $110 a barrel is taking only half as big a bite out of Americans' pocketbooks as it did in 1981, the last time Iranian shipments were disrupted.
The cost of a barrel of crude in the U.S., adjusted for total disposable income, was $107.92 in January of this year, compared with a peak of $213.44 in the same month in 1981, according to data compiled by Bloomberg and the Energy and Commerce departments. Oil consumption was 4.8 percent of income in 2010, compared with 9.7 percent in 1981, the data showed.
For all the concern over the fallout from sanctions against Iran and the prospect of gasoline topping $4 a gallon in a U.S. election year, the distress caused by rising oil prices is being mitigated by improved household purchasing power, a strengthening economy and America's growing energy independence.
"The threshold to withstand the run-up in energy prices is higher than most people think," said Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. in New York. "We can tolerate fuel at $4. Job growth is stronger and incomes are looking very decent. The economy is on firmer footing."
Gross domestic product grew at a 3 percent annual rate in the fourth quarter of 2011, the most since 2010, while unemployment held at a three-year low of 8.3 percent in February, raising the likelihood that consumers will boost spending.
Oil futures for April delivery rose 82 cents, or 0.8 percent, to settle at $107.40 a barrel Friday on the New York Mercantile Exchange.
When adjusted prices reached an all-time high 31 years ago, Iran had stopped crude shipments following the seizure of the U.S. embassy in Tehran and the standoff over the fate of 52 American hostages. To fight accelerating inflation, Federal Reserve Chairman Paul Volcker allowed the federal funds rate to rise to 22 percent in July 1981, helping push the economy back into a recession which started that month and lasted 16 months.
Oil is rising again as Iran threatens to close the Strait of Hormuz, the transit point for about 20 percent of global crude cargoes, following the European Union's Jan. 23 pledge of an oil embargo starting July 1 to pressure the Islamic republic not to build a nuclear weapon.
Concern that a surge in energy prices will push the U.S. into a recession is premature, according to Neal Soss, chief economist at Credit Suisse in New York.
"Higher gas prices don't help, but before you get really nervous you need to see them go much higher," he said in a phone interview. "The economy will continue to grow through the year."
Declining fuel use compared with past decades may also be helping Americans cope with increased prices at the pump. Household consumption of energy as a share of total spending was 5.6 percent this year, down from 8.9 percent in 1980, according to Riccadonna of Deutsche Bank.