Can the euro zone catch a break? Not with that currency.

This past week, Brent crude oil came within sparking distance of its all-time high—priced in euros that is. On Thursday, it closed at €92.09 a barrel, just 86 euro cents below the peak hit in the halcyon summer of 2008. At Thursday’s $120.11 a barrel, Brent was still 18% below its record when priced in dollars.

The euro’s dwindling purchasing power is both a result of the Continent’s financial woes and a factor tightening the screws. Worse, hot spots like Greece and Spain are particularly exposed due to a high dependence on oil imports. Geopolitics compounds this: Greece relies on Iranian oil for 30% of consumption, says Bank of America Merrill Lynch. Contrast that with the U.S., where  net imports of oil have fallen significantly.

At the current dollar price, a move of less than two euro cents against the greenback would push Brent to a record when priced in the single currency. Don’t start your engines, as they might say in Athens.

– Liam Denning

http://blogs.wsj.com/