Originally posted by Stazi:
India and China although becoming HUGE industrial nations, are WAAAAYYY behind the US in terms of oil usage due to the fact that hardly ANYONE in either of these two countries can afford to own/use cars. The "family vehicles" in China and India and the rest of Indo-Chine usually is a 125cc scooter - hardly compares to the oil consumption of the US, so I don't see them sucking up the oil the US was looking for.



*sigh*

It doesn't matter the quantity that they demand. The fact is that there isn't enough being pumped to meet it. So, what do you do? You charge more for what you got and you sell what you have to whomever is willing to pay the most for it. Basic economics.

And you vastly underestimate the demand for oil in China. China is the world's second largest consumer of oil. Does it demand as much as we do? No. But it demands about 40% of what we do. Considering that just 10 years ago that was more like 20% and 5 years before that it was more like 10% and you see the problem -- incredibe demand growth that has outpaced the ability to increase supply to match. So you end up with a net difference that tightens supply. When supply tightens and/or people fear shortages, they bid the price up to ensure that they get what the need.

In order to not lose just 5% of what they need people are willing to pay double or triple to ensure that the get it all that they need. We see that at the pumps now. But the same exact thing happens on the crude oil markets just on a larger scale.

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