August 2008, Paul Stevens, Chatham House
The report argues that unless there is a collapse in oil demand within the next five to ten years, there will be a serious oil 'supply crunch' - not because of below-ground resource constraints but because of inadequate investment by international oil companies (IOCs) and national oil companies (NOCs). An oil supply crunch is where excess crude producing capacity falls to low levels and is followed by a crude 'outage' leading to a price spike. If this happens then the resulting price spike will carry serious policy implications with long-lasting effects on the global energy picture.
The report develops a forecast of future oil demand and supply based upon a number of assumptions. While the
forecast is controversial and extremely bullish, even allowing for some increase in capacity over the next few
years, a supply crunch appears likely around 2013.
