Iran halts oil sales to France, Britain

[FarCenter]

13. The problem is that global production has more or less plateaued

Depending on how you measure it, the world produces around 89 million barrels/day. The decline in production in old fields is being offset by new fields coming into production and by enhanced recovery technology being applied to old fields.

So, there is essentially no net increase in oil coming to market, and the new oil replacing production declines is very expensive, such as in the very deep off-shore Brazillian fields.

Meanwhile, demand is increasing in emerging economies, which causes global prices to rise. This is particularly bad for countries like the US who have not imposed heavy taxes to limit imports in the past.