The world is not producing any more oil than it produced 5 years ago. For the first time in many years, annual oil production has been flat in spite of rising prices. The production of conventional oil (on land oil wells, shallow water oil wells) is going down. An increasing portion of the world's production is no longer cheaply produced oil, but very expensive tar sands, deep water oil). There is a great deal of oil left. We are not running out of oil. We are running out of cheaply produced oil. What remains is dirtier, more difficult to refine, very expensive to produce oil. The oil price spikes are not primarily speculation or gouging. It is a reflection of underlying reality. Oil prices have been going up in fits and starts since the late 1990's. It is time to wake up. Our civilization has been built on oil, cheap, plentiful oil. We are producing more than at any time in history. The demand is greater than at any time in history, greater than our level of production. The primary reason for long-term rise in prices is supply and demand. The most probable cause of short-term spikes is upward pressure on prices due to declining stocks of cheap oil and reliance on more expensive oil. Speculation probably plays a significant, but secondary role. This upward pressure continues until demand for oil drops due to recession; when many can no longer afford oil, the price drops. We need to conserve, we need to electrify rail and build out passenger and freight rail. The International Energy Agency has declared that short-medium term that oil supplies will be tight and demand will not be met at current prices.
In addition, the number of oil exporting nations is shrinking as the economies of those nations grows. The US used to export oil, it is the 3rd largest producer of oil behind Russia and Saudi Arabia. Britain used to export oil, Indonesia.
The Chinese are not fools. They are no longer able to produce enough oil domestically to supply themselves so they are buying up as many contracts in Iran, Africa and the Mideast as they can. As the Chinese economy grows, they need oil to fuel it. The US uses more oil than any other economy with 300 million people. China with 1.2 billion people, is building high speed rail, nuclear and coal power plants as well as renewables. They are also buying more automobiles to use more oil. Many Chinese people want to live the way we do. We don't have enough oil, metal, rare elements and fresh water to supply the world with hundreds of millions of additional automobiles. Our world has limited capacity for industrial production and its
by products--pollution, immense waste and vast income disparities.