WHEN PRESIDENT Bush closed American ports to Iraqi and Kuwaiti oil, he made exactly the right responseto unprovoked aggression. The European Community has now joined that boycott, and with that it has severed Iraq from all of its major customers in the West. Japan says that it has the boycott under consideration, and if it similarly bans this tainted oil Iraq will be reduced to selling in dribbles. Instead of soaring upward with sales of Kuwait's production, Iraq's oil revenues will sink and aggravate the troubles of an economy overtaxed with the burdens of war and an inordinately oversized army.

There's been a lot of talk about the oil weapon over the years. Usually it refers to the producers' power to extract higher prices or political concessions from their customers by cutting down the supply. But like most weapons, it's two-edged. The customers too can use the oil weapon. No weapon is cheap. This one will require an unusually high degree of cooperation among the governments of the industrial countries, and a willingness to get along with a little less oil. But in the end it will be far less costly than passing a resolution, yawning and going back to business as usual with the Iraqis.

The arithmetic of a boycott is not impossible. True, Iraq and Kuwait are major producers. Together they pump nearly 5 million of the slightly more than 60 million barrels of oil that the world produces and burns every day. But some countries, if they choose, can produce more than they are now. The Arab states of the Gulf, and particularly Saudi Arabia, are the key.

If the industrial countries are to ask the Saudis to lift production, they will have to provide an absolutely explicit and unconditional guarantee of protection against Saddam Hussein, whose tanks are now on the Saudis' border. The United States has already warned Iraq that any invasion of Saudi Arabia will be met with American force. It would be agreeable if other countries dependent on imported oil were to join that guarantee.

A general embargo against oil from Iraq and its captive, Kuwait, will mean a higher price. It's hard to say how much higher, because that depends in a very large part on the consumers. If they panic as they did in the last oil crisis 11 years ago, and frantically begin bidding against each other, they could create another economic disaster. If they keep their heads and exercise restraint, the price rise can be kept within tolerable limits. This is not 1979. American industry, for example, now has built a substantial capacity to switch from oil to natural gas for its boilers. It's time to start giving attention to conservation again.

But after several years of cheap oil, the world is now going to have to pay more. Is there an alternative? The prelude to the Iraqi invasion of Kuwait was a quarrel about the present price of oil, which Saddam Hussein thought much too low. If he gets away with this criminal act, he will certainly use his new hegemony in the Gulf to see that prices rise. Paying more for oil isn't the choice. The only real choice is whether to pay more to Iraq.