When it comes to the price of oil lately, one thing is for certain-it's been volatile.

Bouncing off its recent lows at the $50 dollar mark, oil has since exploded to the upside, reaching and briefly surpassing the key technical level of $60 on Friday. Continued frigid weather, a U.S. oil field closure, recurring Nigerian violence and Iranian saber-rattling have all combined to push the price higher.

But while winter's grip will soon be broken and the supply concerns in regard to the shutdown can be overcome, the geopolitical landscape is as unpredictable as ever, which has oil traders everywhere attempting to price in that risk. The result is much higher prices.

Chief among these risks is Iran. On Friday the country shook the markets when a top Iranian cleric boldly proclaimed the United States was within Iran's "firing range."

In a Friday prayer sermon carried live on state radio, Ayatollah Ahmad Jannati said, "Americans have us surrounded but it works to our advantage. They are within our firing range in the east, west, and elsewhere."

The comments came only days after supreme leader Ayatollah Ali Khamenei vowed to hit back at U.S. interests worldwide if attacked.

Those threats further highlighted the dangers Iran poses to the Straits of Hormuz, the world's most important lifeline in the free flow of oil.

On the same day, an Iranian naval officer invoked that very premise as he darkly warned that the fate of the strait is within his grasp. "In the worst situations we are able to turn the region into a burning hell and take the possibility of using the Persian Gulf away from them forever," Rear Admiral Mohammad Ebrahim Dehghani said, as quoted by the Mehr news agency.

Recent Iranian missile tests would seem to give those statements a weight that they didn't previously carry. During the week, Iran flexed its muscles with tests of land-to-sea missiles with a range of 350km, enough to put the entire Gulf at peril.

But it wasn't just the continued reckless behavior of Iran that had the full attention of the traders. On going violence in Nigeria also caused crude to rise.

Kidnappings, armed robberies and militant attacks on oil infrastructure there threatened to knock the country from its perch as Africa's largest oil producer.

Recurring violence has already managed to shut in about 600,000 barrels a day, and analysts worry that foreign companies and workers may soon decide to reduce production even further as the situation there becomes more dangerous.

"The biggest disruption of Nigeria's oil industry could be the reluctance of foreign expats to come and work here," said Nnamdi Obasi, senior analyst at the International Crisis Group.

Top producer Royal Dutch Shell echoed those sentiments. "Shell continues keep the situation in the Niger Delta under review," a company spokeswoman said, "The safety and security of our staff, contractors, and communities in which we operate is our top priority."

More than 100 foreigners have been seized by militants in the last year as attacks have increased across the Nigeria's delta region where its crude is pumped. More than forty of those abductions have occurred in the last month alone. The prospect of a Nigerian election has only further ignited the country's warring factions, putting continued supply concerns at the top of traders' list of worries.

Taken together, these troubles in Nigeria and Iran add up to one giant unanswered question that promises to keep the price of crude closer to $60 a barrel than $50.

And it hardly ends there. To arrive at the true cost of oil, you have to go far beyond the price of the traders. You also need to add in the costs of keeping it all flowing. And in that regard, the cost is skyrocketing.

During the same week that all of these headaches reemerged, the Bush Administration revealed its budget request for future military spending. And it was huge. At nearly US$623 billion for the fiscal year that begins on October 1, its size managed to outpace the largest budgets of World War Two. That's double what was spent during the Clinton administration.

It is a swollen request that is undoubtedly due in large measure to our commitment to keep all of that oil flowing from the world's hotspots. And to no one's surprise, those commitments now extend to Africa, which is projected to provide a quarter of U.S. oil imports within a decade.

The Pentagon has recently revealed that it is even creating an African Command to help secure those supplies.

By comparison, China is spending a paltry $87 billion on its defense, while Russia has committed only $31 billion.

But given our dependence on foreign imports, it is a price the administration seems willing to pay to ensure our continued supply in the face of an increasingly dangerous and unstable world.

Because of this the price of oil will likely continue to climb both at the trading desks and within our nation's defense budgets.

Oil, after all, is volatile for a reason, and these days it has little to do with the weather.

Wishing you happiness, health, and wealth,

Steve Christ