It was inevitable. The ballooning price of oil has joined presidential politics, Joe Torre, and the soaring costs of overseas travel as another hot topic of conversation on Wall Street’s cocktail party circuit.

With oil spurting Friday to a near record $90 a barrel, a major catalyst behind the day’s wicked 366.94-point plunge in the Dow, I rang up one of Wall Street’s most respected and sharpest oil industry minds, Fadel Gheit, to get his assessment of what he sees next in the steaming oil patch.

The veteran energy analyst at Oppenheimer & Co. stunned me with a contrarian’s forecast. In brief, he predicts a crash in the price of oil to about $55 a barrel in the next two to four months, accompanied by an across-the-board decline in energy stocks of about 10% to 20%.

This prediction, that the price of oil will decline nearly 40% over a relatively short period, seems farfetched — and it’s a minority opinion. The fact that oil has hit $90 a barrel suggests that an even larger leap to the long-predicted yet elusive $100-a-barrel price tag could soon become a reality. Even that $100 forecast itself could soon become obsolete, what with some pros now raising their outlook to $120 to $150 a barrel.

Whether they’re right is anybody’s guess, but our $55-a-barrel forecaster, given his credentials, is not a fellow to be taken lightly. Referring to his bold forecast, Mr. Gheit, who has been monitoring black gold trends for about 30 years, tells me, “The players in the world’s biggest gambling hall, the oil trading pits, are in for a real shocker.”

That’s his crash projection, which largely hinges on what he sees as a significant global event or, more specifically, his expectation “that one way or another, the stalemate between President Bush and Iran over its nuclear ambitions will soon be settled.”

Pointing to what he believes are high-level government actions to help bring this about, he cites President Putin’s recent visit to Iran and Prime Minister Olmert’s trip to Russia to meet with Mr. Putin. Mr. Gheit estimates that increased probability of military action against Iran has inflated oil prices on average by about $10 to $20 a barrel. He says the recent passage of a Senate resolution labeling Iran’s Revolutionary Guard a terrorist organization and the continued buildup of the U.S. Strategic Petroleum Reserve have also fueled speculation that such action is now very likely.

The analyst observes that all conflicts in the Middle East over the last 35 years have been preceded by a run-up in oil prices, subsequently followed by a sharp drop in prices. Contending that the current run-up in oil prices has largely been triggered by excessive bank and hedge fund speculation, Mr. Gheit figures any indication that the American-Iranian stalemate is close to being resolved could lead to widespread dumping of traders’ oil positions, exacerbating a price decline. In other words, any spike would be short-lived.

“Keep in mind,” he says, “there is no oil shortage, that oil is now a classic commodity bubble, a disconnect between perception and reality due to the willingness of some people to pay a very high price for it.” On fundamentals alone, he argues, oil should be selling at no more than $45 a barrel. Mr. Gheit rejects the widely held notion that oil supply disruptions would follow any military strikes against Iran since, as he explains, “Iran needs oil export revenues more than the world needs its oil exports.” He estimates that oil exports account for 50% of Iran’s gross domestic product and 90% of its hard currency earnings.

Currently, Mr. Gheit notes, worldwide oil inventories exceed 4 billion barrels, which equals 2.7 years of Iran’s production, 15 months of Saudi Arabia’s production, and more than seven months of the entire Middle East production.

His view of energy stocks, which have run rings around the market the past couple of years, rising 31.3% year to date following a 22.2% gain in 2006: “I would stick with the quality names like ExxonMobil, Chevron, and ConocoPhillips, and lighten up on the smaller names.” He recollects that in the sell-off of energy stocks in the second half of last year, many industry small caps lost 30% to 50% of their value.

A couple of other petroleum trackers disagree with his view. An energy consultant to Trim-Tabs Investment Research of Sausalito, Calif., Bob Berke, expects oil over the near term to climb to $100 a barrel, if not $120. That reflects Turkey’s threat to invade northern Iraq and his expectations of another rate cut, leading to a further fall in the dollar. “If we attack Iran, throw out all the calculations,” he says. “Oil could fly to $200.”

The CEO of Houston-based Dune Energy, Alan Gaines, thinks $100 a barrel, or possibly $120, by year-end is a distinct possibility. “If it settles at around $100, and it well could, it means get ready for $4 a gallon at the gas pump.”

dandordan@aol.com