Some say that the Saudi fields' production has been pushed beyond sustainable levels for some time now, and as a result production could suddenly collapse, perhaps by the end of this year. The OPEC countries have been reporting essentially constant reserves since 1990, despite extracting significant quantities of the stuff. Since their quotas are based on their reserves, there is a good chance that they are misreported.
There are lots of real world signs that connected decision makers are aware of the reserves/production problem, and have made their investment decisions accordingly.
There are other things that don't make sense, for instance, why do crude prices go up when a refinery stops? One would expect the price of crude (the input to the refinery) would go down, and only the products, gas, kerosene, etc. would increase in price. That is curious, and probably a second degree affect from ill informed "investors".
The ME has always been an unstable area, an investor would discount current uncertainty against the historic backdrop.
How much would you pay for a gallon of gas? It's real world value is much higher than the price we pay, is it not? Demand is relatively inelastic, and growing due to economic expansion in US and China.
Discoveries of large deposits of oil are rare, and the last one was a long time ago in Saudi Arabia, despite lots of people looking. The some 30 major fields of Saudi Arabia are 20-30 years old. But despite large extractions of oil, Saudi Arabia says its reserves are about the same as they were some 15 years ago - believe that? They say they have huge reserves, but are tapping them at a very low rate. Believe that? (In 2003, Russia had 4x the production rate per reserves, the UK some 13x).
There is essentially no exploration or new drilling right now in California. A number of offshore fields are completely untapped. There are others here on land, that were slightly tapped by wildcatters during the 1930s but have never been fully developed. One of these is where I live. This scenario repeats across at least 20 other oil areas in the CONUS.