Many industry experts continue to argue that today's high prices are temporary, the result of technical bottlenecks, sharply rising demand from Asia, and a plummeting dollar. "People will run out of demand before they run out of oil," BP's chief economist declared at a meeting early this year. Other optimists, however, are wavering. Not only have oil prices soared to historic levels, but unlike past spikes, those prices haven't generated a surge in new output. Ordinarily, higher prices encourage oil companies to invest more in new exploration technologies and go after difficult-to-reach oil fields. The price surge that followed the Iran-Iraq war in the 1980s, for example, eventually unleashed so much new oil that markets were glutted. But for the past few years, despite a sustained rise in price, global conventional oil output has hovered around 85 million barrels a day, which happens to be just where Husseini's calculations suggested output would begin to level off.
The change is so stark that the oil industry itself has lost some of its cockiness. Last fall, after the International Energy Agency released a forecast showing global oil demand rising more than a third by 2030, to 116 million barrels a day, several oil-company executives voiced doubts that production could ever keep pace. Speaking to an industry conference in London, Christophe de Margerie, head of the French oil giant Total, flatly declared that the "optimistic case" for maximum daily output was 100 million barrels—meaning global demand could outstrip supply before 2020. And in January, Royal Dutch Shell's CEO, Jeroen van der Veer, estimated that "after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand."
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