A Price to Pay

We are in the midst of the first oil shock in the modern era of globalization. In today's U.S.-centric world, that spells unusual vulnerability. If higher oil prices take a toll on the over-extended American consumer, nations that rely on exports to the U.S. as major sources of growth will be hurt. That puts Asia right in the crosshairs of the energy shock of 2005.

The risk is mounting of a sharp global slowdownand possibly a recessionsparked by rising oil prices. U.S. consumer spending is likely to slow markedly if oil prices just stay at about $60 a...