West weighs price of sparring with Iran. Gulf uneasiness shakes world oil market but threat to supply is low

A modest surge upward in oil prices has greeted first the prospect - and now the reality - of American-flagged and protected oil tankers cruising the dangerous waters of the Persian Gulf. For the battered oil industry both in the United States and overseas, that's a welcome turnaround.

And even for Western consumers, who will probably have to pay higher gasoline and oil prices, it is not all bad news. There is little sign that the current price increases will suddenly soar much higher and do any serious damage to national economies.

For several weeks, the international oil markets have been visibly jumpy. Worried traders have been locking in oil purchases in case Iran and the US come to blows and energy supplies are threatened.

This is the biggest reason for the rise of oil prices above $20 a barrel - the highest level in 18 months.

``The kickup is primarily the result of the Iran-Iraq war and nervousness in the Gulf,'' says Daniel Yergin, who heads Cambridge Energy Research Associates in Cambridge, Mass.

Whatever their origin, higher prices are giving oil producers in Texas, Oklahoma, Louisiana - and Mexico, Saudi Arabia, and Nigeria - something to smile about for the first time in almost two years. One year ago, economists were talking about the demise of OPEC and an era of $10-and-below oil.

That era never happened.

Sobered by the financial pain of those low oil prices, members of the Organization of Petroleum Exporting Countries began to control production late last year, reaffirming their commitment in a meeting 3 weeks ago. Meanwhile, motorists, especially in the US, have been burning gasoline much more than expected, little worried about the upticks in prices every time they fill up.

And now there is the Gulf crisis.

Sanford Margoshes, veteran oil analyst with Shearson Lehman Brothers, says because the heat has been turned up in the Gulf it is virtually certain that crude will finish 1987 above $20 a barrel. If there is an incident in the Gulf, he says, ``you could see a price spike to $25 or higher - and then a quick retracing.''

How vulnerable Western oil supplies are depends on what exactly happens in the Gulf. The bulk of Saudi Arabian crude, for instance, avoids the Strait of Hormuz by flowing by pipeline to the port of Yanbu on the Red Sea. It is not immediately in danger. The tanker escort operation will help keep oil going as well. And cushioning against any supply interruption are millions of barrels of unused production capacity and strategic reserves held by Western nations.

So even in the worst case of a US-Iranian military confrontation in the Persian Gulf, oil is likely to continue moving in roughly the same volumes. Countries outside the Gulf would take over as key suppliers. But prices might spike up because of panic buying and temporary shortages.

The economic impact of higher prices is mixed:

Higher inflation is one result. Last year's oil bust helped keep inflation under control. There's been no such help this year. The consumer price index, for instance, was up 0.4 percent in June, an annual rate of 4.3 percent, according to figures released yesterday. For the first half of the year, prices rose even faster, climbing at a 5.4 percent rate. Higher energy prices are the single biggest factor in the inflation rate; most other prices have remained low.

There could be somewhat worse economic problems for indebted nations that import oil. Brazil and Argentina are in this category. But there should be improved conditions for indebted oil exporters such as Mexico, Nigeria, and Egypt.

In the industrial world, Japan, South Korea, West Germany, France, and Italy, among others, would have to pay more for imported energy. Britain, Norway, and Canada would earn more. This, in part, explains why the British stock market has been doing well in recent weeks. The Soviet Union, the No. 1 oil producer in the world, also would benefit.

Higher energy costs would be a wash for the United States, which still produces great quantities of oil but has a high import bill as well. The energy producing states - Texas, Oklahoma, Louisiana, California, Colorado, Wyoming, and Alaska - would see some economic gains. Regions that import energy - in particular the Northeast - would do marginally worse. (See accompanying story.)

A $20-to-$25 price, in short, would be tolerable for just about every group. Prices would still be significantly lower than they were in late '85, and much lower than the $34 a barrel of 1982. Inflation and a falling dollar (oil is denominated in dollars) continue to whittle away the price of oil in real terms. But the ruin that visited oil areas (and the banks with loans out to energy producers and third-world oil exporters) would recede.

There is still too much underused oil capacity in the world for supply to narrow and prices to rise much beyond their current levels. If the Iran-Iraq war ends, those two countries would likely turn on the taps to pay for the vast rebuilding programs. This could cause oil prices to drop again.

``That depends, of course, on how the war ends,'' notes Dr. Yergin, the Cambridge energy analyst. Meanwhile, if the status quo persists in the Gulf, he says, ``by next month prices could go back to where they were and supply and demand would be the most important factors.''