Obviously, it takes people to load vessels and monitor everything from oil wells to refineries to pipelines. A simple strike could be very disruptive to the supply chain. Recall the significant impact of the refinery strikes in France last year, which involved really a small amount of global refined productive capacity.
Stability in Saudi Arabia is the ultimate concern, and there is a lot to be concerned about. There is a fair amount of repression, a young population, and an aging ruling family. Sound familiar? The Middle East freedom fever does appear to be encircling the Kingdom. Bahrain proximity was noted above, and, the country of greatest concern to me, Yemen, represents a figurative Achilles's heel on Saudi's southern flank. Yemen is also home to Al Qaeda on the Arabian Peninsula - a group with designs on overthrowing the Saudi ruling family, among other anti-Western objectives.
The geopolitical premium looks to be with us for some time. The outlook for oil prices from a purely fundamental supply perspective is lower. Inventories in the United States for crude oil and gasoline are at or near record highs. But the markets are pricing those stores in terms of how dear those barrels and gallons would be if unrest spreads and mere strikes or simple attacks impact output.
If Saudi Arabia begins to appears vulnerable, in the least, to publicly expressed internal discontent, $100 oil will look cheap in a hurry!
John P. Kilduff is Partner at Again Capital LLC . He's also a CNBC contributor.