Oil just passed $109 per barrel. Run for the hills, or at least for your hybrid vehicle. The alarm mentality is thick in the air today, but everyone just needs to take a deep breath. Given that oil prices are based on speculation, the worst possible response is worldwide panic.

The more we worry out about the price of oil the higher it will go in our speculative economy. Oppenheimer & Co. oil analyst Fadel Gheit thinks high prices are giving people an incentive to sell crude oil now and restock supplies later. In theory, this should lower the price over time as supplies increase, but prices have only gone up. “It’s pure speculation,” Gheit said. “What’s changed that we didn’t know in January?”

Some blame the war in Iraq for this price spike, but most don’t understand the correlation. The intent of the war was to stabilize the region and maintain a steady flow of oil to Western nations. The United States has achieved the second goal at the cost of the first as tensions in the region have steadily pushed prices up the speculative ladder.

While the war has created instability, the alternative might not have been better. The war in Iraq has engaged the enemy on their home turf and, in effect, kept them off ours. Had we not gone into Iraq, letting al-Qaeda easily move their bases there from Afghanistan–which they were able to do even with us there–perhaps we would have suffered another major attack on U.S. soil. This would have destabilized our markets again, driving up the price of oil anyway.

We are also not the only player in the Middle East. Associated Press commented Friday that Turkey’s incursion into northern Iraq is another reason for oil’s continued price rise.

The many hypotheticals in the oil debate, along with the vast array of causes, should take us away from the blame game and encourage us to focus on solutions, like drilling in Alaska or playing hardball with OPEC. Oil is high because we are fighting a war. Oil is high because people are scared.