The London Times published a major article yesterday on the oil supply problem. Can't link because they require the most insane registration on the planet. The gist of it is

Refinery margins are now $10 per barrel
OPEC is fixing prices
We are afraid to disturb the House of Saud
Environmental and other permitting restrictions make it virtually impossible to build new refineries
There is a "risk premium" of between $5 and $10 per barrel right now
(1)Terrorists in Iraq periodically sabotage that nation's pipelines. Unrest and violence in Nigeria, Africa's largest producer, make that country an unreliable source of oil. Islamic terrorism casts doubt about the reliability of supplies from Kazakhstan.
(2) Putin's jailing of all the capitalists has completely dried up capital investment in Russia's reserves
(3) Chavez in Venezuela has replaced all the managers with amateurs and they can't deliver low sulphur oil.

Most important is Saudi Arabia which sits on almost 300 billion barrels of "unproven" reserves, but they know exactly where they are. In addition these reserves are recoverable cheaply. They haven't drilled a well in years. Finally, the Saudis are about to bite the dust because it has become obvious that they have allowed the al Qaeda Terrorists to almost take over; foreigners are now leaving in droves and there is nobody else to run the business. Late add: Peter Brookes (the best business reporter for any daily) has a terrific column up right now. London Times piece is now on Weekly Standard HERE