Oil supplies are likely to be tight in the next few years and prices will reach new heights according to a report yesterday from the International Energy Agency. This leaves us in a very vulnerable position if there are cuts in supply due to Middle East turmoil or terrorist attacks on oil installations and pipelines.
Demand is expected to reach nearly 96 million barrels a day by 2012 and even without the above possibilities it is doubtful whether that will be achieved as some major oilfields now have declining production.
James Moore in The Independent reported:
“The demand will be driven by the fast growing economies of Asia and the middle east, where the thirst for black gold will grow more than three times faster than the 30 industrialised members of the Organisation for Economic Co-operation and Development. That is because several countries in those regions are set to break the $3000 per capita income level, when consumers can afford to buy energy-consuming products such as cars and white goods.”
Our farming and distribution industries have been built on cheap, reliable and plentiful oil supplies. Expensive, unreliable and short supplies will not do. It will only take one major event that reduces supplies further to cause panic and the hoarding of both oil and food, making the problems even worse.