Iraqis, Russians, and Saudis use oil, too

One underappreciated aspect to the recent spike in oil prices: Saudis drive cars, too. What happens when Saudi Arabia (as just one example) gets flooded with oil dollars because the price has gone up nine times since the lows of 1998? Well, the Saudis buy more cars, that what happens. So do the Venezuelans, the Russians, the Qataris, etc.

The fact that oil exports are dropping even faster than production in some provinces - as a result of higher domestic consumption - means that America has an even bigger problem than the (as-yet hypothetical) oil production peak. After all, production means diddly squat (for an American, at least) if the oil never makes it to US shores.

Adding to the complications, in many exporting countries the domestic price for oil is kept artificially low, meaning consumers have no reason to change their habits. It's possible that, until the Saudis and Russians start being net oil importers, they'll have no reason to remove the subsidies and tariffs that keep prices so low.