The Oil Drum: Of Oil Supply trains and a thought on Ain Dar

One of the critical factors in making sure that there is enough of an energy supply to meet the growing international demand lies in the logistics of the supply train that is going to have to provide it. When CERA and others point to the totality of the available resource, as Nate is pointing out in his series, they neglect the realities of that chain, and the parts that all have to work if the electric light is to go on the next time that you flip the switch on the wall.

Thus, if for example, Saudi Aramco tells Asian refiners that it is cutting supplies by 9% that does not mean that when a Japanese driver pulls into the gas station tomorrow that he will face a large EMPTY sign. Rather, in March Aramco tells the refiners that it will cut supply in later months, and thus the impact is not immediately evident.

Much more after the jump to The Oil Drum.