Report: World Running Out of Oil

AP Photo
The Associated Press

This article originally appeared in The Week:

After a year in which the oil price plummeted and the industry adjusted to a period of global oversupply, an analyst has claimed that the world is running short of oil.

The bold claim comes after Saudi Arabia and its main Middle East Opec partners turned down Chinese requests for extra oil.

Reuters reports that the Saudis are holding back fuel for their own refineries as demand from the world’s biggest crude importer hits new records.

Saudi Arabia has previously resisted calls from Opec allies to cut production in an attempt to drive up the oil price, as it pursued a policy of low prices and high production volumes in order to undermine the profitability of the US oil industry.

Saudi’s rejection of China’s request for more crude may help to explain why oil prices have risen by 40 per cent this year. Chinese importers have had to look to the likes of Russia, Oman, and other non-Opec nations.

Writing on OilPrice.Com, Leonard Brecken asks: “Why would Saudi Arabia refuse to supply China unless oil was, in fact, tight?” He says there is “growing evidence that not only are we slowly rebalancing but the world may actually be running short of oil.”

Read the full story at The Week.