Deirdre McMurdy

Despite months of righteous rhetoric and backroom lobbying, it didn't come as much of a surprise when the European Union ultimately decided to defer a vote on banning the import of oil extracted from Canada's controversial oil sands.

True, there was a recent report from eminent scientists at the University of Victoria that declared responsible development of the oil sands was less damaging to the environment than the continued use of coal as a fuel to generate electricity. But emotion has so often trumped science in past debates about the oil sands, it certainly wasn't a game changer this time around either.

Without question, it was practical politics -- and the economic jitters that drive it -- that prevailed.

Fact is, world oil prices have soared to record levels recently, threatening any early signs of global economic recovery. In part, that's because of an embargo against Iran, a punishment for its nuclear program, which has caused that country to curtail its shipments of oil to several European countries (as well as the U.S.).

No matter how green a politician may be on the hustings, when it comes to keeping consumers moving and economies humming, the provenance of the oil doesn't matter quite as much.

It's not the first time -- or the last -- that oil prices and security of supply move from simmer to a front-burner issue. But arguably, the stakes are higher than they've ever been on several fronts. That's particularly true in the U.S. where gas prices have become an issue on the presidential campaign trail.

Furthermore, any variable that negatively affects the American economy inevitably has a direct bearing on Canada's fortunes.

Certainly the math is daunting: A 25-cent jump in gasoline prices, if sustained over a year, would cost the U.S. economy about $35 billion.

That may only represent 0.2 per cent of the total economy, but it's a meaningful amount, at a time when growth remains tepid. In the fourth quarter of 2011, the U.S. economy grew 2.8 per cent, a rate which is considered a weak performance on the heels of a recession.

And that's hardly good news for Canada, a country that -- however much it flirts with China -- continues to rely on U.S. demand for its exports.

Soaring oil and gas prices now foreshadow even sharper increases at the pump because gas typically rises in March and April when refinery inventories switch over and gasoline is more costly to produce.

(The gasoline made for summer driving is mandated to have less butane and other cheap organic compounds that contribute to hot weather smog. It also means there is more straight oil -- and expense -- in each litre.)