Incidentally, oil prices are now at 1973 levels after adjusting for inflation.It has always amazed me how cheap oil is, given its value to industrial economies.
The very low price may be a result of the huge military expenditures required to maintain supply (and which are not added into the price.)
However, all that is about to come to an end, Greenspan or no Greenspan.
Right now, China uses about 6 mbbls/day, which translates into a per capita use of 3.8 bbls/day per 1000 people.
By comparison, per capita use in the United States is 67.8 bbls/day per 1000 people.
If China consumed oil at the same per capita rate as the US, their consumption would be about 67 mbbls/day.
Given the total supply is 80 mbbls/day, it doesn't take much to realize one of four things are going to happen.
1. Daily oil production increases to 120 mbbls/day in order to accommodate increased demand.
2. The United States cuts its consumption by 11 mbbls/day in order to end the requirement for importing oil.
3. The United States increases its military presence in the Middle East, and threatens other countries (China) with nuclear weapons if they try to take the oil.
4. The free market prevails, and oil is sold to the highest bidder.
Which of these do you think is most likely?