Energy agency estimates that an oil crunch could happen earlier than 2020 because of increased demands.

Now, the oil prices have risen again past $80 and as the demand is picking up, the prices will rise even higher. No doubt then that we are staring at a sudden supply crunch in oil and gas. So, when that happens, what are the implications of this oil supply crunch?

For a developed country like the U.S., oil is more to do with national security. The same goes with countries of western Europe and China where there is an increasingly blurry line between politicians and the oil industry. Hence a supply crunch could translate as a paramount threat to national security-enough of a reason to escalate tensions or wage war on any oil producing country, as has been done in the past.

Want further proof of political involvement? Nowadays when any major oil deal is cut, diplomatic corps of these countries are directly involved in the process of negotiation. Indeed countries like the US, Western Europe and China purchase oil with strong political and diplomatic pressures, and the resulting deals more and more often guarantee exclusive rights of purchase to the buyer, leaving anyone else empty-handed. Dealings in Crude Oil are fast becoming a ‘winner gets all’ market place. This month China has inched closer to acquiring almost one-sixth of Nigeria’s proven oil reserves. Apart from the African continent China has also invested heavily in Latin America for oil.

**edits by AGORACOM

"includes excerpts from http://www.oil-price.net/en/articles/Oil_supply_crunch_and_the_world.php