At the time of writing, the S&P 500 continues to climb. Oil prices have eased on the news that Venezuelan President Hugo Chavez is brokering a deal for ‘friendly nations’ to provide a peacekeeping force that will prevent Libya from descending into civil war. Libyan leader Muammar Gaddafi is reportedly considering the proposal, which excludes the US and all European nations.

Whether an effective peacekeeping force can be built without US or EU participation is open to question. But Libya produces about 2 percent of global oil output, and an end to the unrest in the country would defuse concerns about disruptions to global oil supply.

Regardless of whether foreign peacekeepers ever put boots on the ground in the North African nation, the political upheaval has spurred concerns over global energy security and the still-nascent global economic recovery.

It’s too early to declare that the global consumer has fully recovered from the economic crisis. But rising consumer spending is helping fuel corporate profits. Any event that might upend the apple cart poses a serious threat to the global economic recovery.

Low gasoline prices have helped boost consumer confidence as lower daily expenses free up cash for discretionary purchases. But the record has skipped at that party–gasoline prices rose by 20 percent at the end of February. Surging fuel prices will almost certainly cause Americans to hunker down again. Travel-related businesses will be hit first. In an ominous sign, several airlines resumed fuel surcharges in February. Higher transportation costs will inevitably cause prices to rise on all manner of products.

Higher oil prices also affect the consumer in unexpected ways. The cost of plastic–ubiquitous, critical and made of petrochemicals–could jump in the event of sustained high oil prices.

Most analysts estimate that oil prices of $100 per barrel could shave as much as 0.3 percent off US economic growth. These aren’t just entries in a ledger; each lost basis point represents diminished job creation. As a result, some US lawmakers are calling for the government to relieve price pressures by releasing oil from the Strategic Petroleum Reserve. Other lawmakers are calling for direct US intervention in the region.

Here is the unvarnished truth: The US economy can survive with oil prices at current levels.

But the real worry is that the price of oil will continue to climb to levels seen in 2008, when a barrel of oil cost $150 and a gallon of gas set consumers back by $4 to $5. That’s the outcome that keeps economists awake at night.

These near-term concerns are only the tip of the iceberg. Oil is a dwindling resource. The turmoil in Libya is only the latest in a string of wake-up calls that the US must reduce its oil consumption to secure its long-term prosperity.