Over a barrel

Surging oil prices feed widespread panic and apocalyptic visions of a world without fuel. But it is not obvious whether speculation, rising demand or supply shortages are to blame. Daniel Ben-Ami examines the debate.

[…] Mad Max 2, the 1981 movie starring Mel Gibson, was based on a post-apocalyptic vision of a world with little oil. At the start the narrator described how a world based on oil usage had gone to war and collapsed. The film itself is centered on a besieged community, living by an oil well, surrounded by murderous renegades. The scenario, written by George Miller, was conceived in response to the oil crisis of the mid-1970s.

When crude topped $145 a barrel back in June similar anxieties were apparent. Prices for diesel and jet fuel rose even more sharply. There was a widespread fear that the surging oil price could stoke up inflation and do severe damage to the world economy. Obviously, sober commentators did not quite paint Mad Max-type scenarios but concern about the damaging effect of oil shortages were apparent.

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