| Demand has increased, refinery capacity has dropped dramatically as Zap stated due to the cost of refurbishing them to comply with environmental regulations which made some just shut them down rather than spend a lot of money. Then you have states like California that basically decided to ban new installations to preserve their fruit and flake culture.
Then we have the Saudis and a couple of other producers like Venezuela and Mexico that have bad problems at home and need the cash to try to stay in power so they have no interest in increasing production to moderate the price.
Some think the Saudis are particularly worried that the extreme religious right in their country will overthrow the ruling family in order to further their dreams of a new world empire so the Saudis are funneling money to them in order to encourage them to stir up problems elsewhere in the world.
In the end, we are to blame for the shortages for our lack of foresight over the last 25 years where we decided to put our energy needs in the hands of others rather than creating incentive to be in the oil business in our own country. |