Oil is a supply side shock creating higher prices for goods due to higher cost of manufacturing and shipping. The higher price for gas for consumers is inflationary by itself.
Yes, we are very vulnerable to high oil prices, but less so than in previous times. Nevertheless a shock could be devastating to our economy. We went from under a dollar in 1998 to over $3 in 2006. Ouch is what my wallet says. My SUV doesn’t look so good to me now! 😉