Why Isn't Oil $200 a Barrel? (Lotus Eaters)

Dan asks why the price of oil isn’t much higher given almost perfect conditions for exactly that.

Clip from: Brokenomics | Why Isn't Oil $200 a Barrel?



Good observations are made in this video about demand destruction that restricts price increases. That, and market rigging. 

Best comments on You Tube:

@sinematographers3344
Crude oil stays at $100 because emergency reserves are being drained and factories are shutting down—not because energy has actually gotten cheaper.

@Anthony-l5w8j
Oil cannot rise to $200/barrel because it is an energy source. The economy is a thermodynamic machine. Everything that humans think of as wealth, is the result of energy reworking matter in some way. Globally, if you plot GDP against energy use, you get a pretty straight line going back at least a century. Western nations have been able to buck that trend by offshoring manufacturing. But stuff has to be manufactured somewhere and it takes a finite amount of energy to do it. Oil is an energy source, in fact it is the main transportation energy source for the world. In most cases, there are no straightforward substitutes. That means there are limits to what consumers can afford to pay, given that it takes x units of energy to produce y units of wealth. Beyond a certain price, you start to see demand destruction, because the oil is costing more than the value it is delivering.

[Posted at the SpookyWeather2 blog, September 27, 2026.]