Welcome to peak oil

From the NY Times (emphasis added):

The possibility of a terrorist attack in Nigeria was enough to tap the oil market's fear that demand-driven pressure on prices might evolve into a full-blown supply-driven crisis.

A sudden restriction of supplies led to the oil shocks of the 1970's, and the lack of spare production capacity, particularly of the types of crude oil easy to refine into gasoline, has made the markets vulnerable to whispers of any potential disruption.

A lack of spare production capacity means that the world is producing just about as much oil as it can. There's a term for a supply-driven crisis caused by reaching maximum production--peak oil.

It is certainly possible that these higher prices will cause demand to drop off, temporarily causing prices to go back down somewhat. This may make it possible for the current level of production to continue for a year or two. But it seems quite unlikely that a higher level of production will ever be possible. Oil discoveries worldwide peaked over 40 years ago, and we're currently using somewhere around four times as much oil as is being discovered annually.

It's really a shame that the US currently has corrupt, criminal and incompetent leadership, whose response to this crisis will most certainly be more wars for oil and a push to use other environmentally-destructive energy sources like nuclear and coal to keep our insane growth economy running until we literally choke on it.