Towards rational pricing of oil

While in 2004, 22.8 MBD of oil was produced in OPEC nations of the Middle East, by 2030, this would have to double to around 44.0 MBD.

There are serious geo-political implications of this shift, but based on the assessment of probable reserves and their exploitation, this level of increase will have to take place in Opec Middle East if the total production has to reach 115.4 MBD in 2030. There is a strong probability that production and export may not be able to reach this level within the next quarter century.

As long as the world encounters what Sheikh Yamani once described as “a nice tight situation” oil price increases will take place periodically when these tight situations occur from time to time. Undoubtedly, the world will reach equilibrium with higher oil prices as they drive down demand far below projected levels.

India Times