What’s up with the price of oil?
The world is not running out of crude oil any time soon. Oil prices have ranged from $30 to $150 per barrel over the past few decades due to rising demand, delivery system problems, refining constraints, rising US supply, and changing government policies. Current annual consumption worldwide is about 25 billion barrels. Proven reserves are enough for 120 years of consumption at the same level, even without new reserves and the economizing that will occur as the price rises.
Reserves would be half depleted with the price tripling after a century in an ideal market. Potential reserves, including fracking and deep sea drilling, will extend supply for centuries. OPEC is losing ability to control the international market. Over the decades, the rising price of oil will lead to improved technology and alternatives in competitive markets.
All of the problems with oil market above ground. Governments own almost all mineral rights. Environmental policies restrict exploration and refinery construction. Investors in alternative energy lobby for subsidies and restrictions on oil production and consumption. The ups and downs in the price of oil promise to continue.