Where is the hugh oil demand coming from?
The problem is not increased demand, it is decreased supply. We have reached worldwide peak oil production, which means that it cannot be gotten out of the ground any faster. Saudia Arabia’s production is flat. They have been pumping sea water into Gawar, their largest field, for some time now, because pressure is so low. The Saudis have been very cooperative with the US government for over a decade by acting as a “swing producer,” which means they would ramp up production whenever the price got too high. This had the effect of increasing worldwide dependence on petroleum products because oil remained so inexpensive. It’s easy for the Saudis to say that they can increase production again, but the actual number of barrels coming out of the ground has not been increasing. Please note that peak production occurs when about half the oil is extracted. So there is still plenty of oil in the ground, it is just increasingly more difficult and expensive to get it out. Geologists and the oil com
