There is categorically no absolute shortage of oil in the world: but political and other non-economic barriers to oilfield development can easily create artificial – and very damaging – undersupply. (Watch out for oil prices in 2011, when economies have recovered from the soft patch that will follow the phasing out of fiscal stimuli). Many of the great oil exporting provinces – Saudi, Russia, Mexico, Venezuela, Nigeria etc – make it difficult and in some cases actually illegal for foreign enterprises to invest in oil projects.
I recently learned of an interesting parallel that, in combination with the oil nonsense has truly comical consequences, if one can be permitted to laugh in such matters. The USA, a great agricultural producer, makes it difficult and in some cases actually illegal for foreign enterprises to invest in US agricultural projects. Perhaps you knew this but I did not.
So: the Saudis, with oil and gas pouring out of their ears but short on food, turn energy into crops (by using it –wastefully - to desalinate sea water and watering the desert).
The Americans, with crops aplenty but short of oil, turn cereals into ethanol - wastefully - and hence into gasoline !
Politicians, eh ? Those whom the gods would destroy ...