There was one thing in particular that caught my attention. Birol makes the usual point that it isn’t in OPEC’s interests for oil prices to be too high as it leads to the major consuming countries taking steps to reduce their demand, but then in the next paragraph he seems to contradict himself, saying:

“In an alternative policy scenario, which looks at the policies and measures in the OECD countries, China and India, all the policies under efficiency, biofuels, nuclear and all of these things, if they were to be implemented as of tomorrow – all these efficiency policies, renewable policies, everything – still Opec’s market share and Opec oil demand will go up. So, the call on Opec, whatever the policy the countries have, will increase. Therefore I do not see any problem from the security of demand point of view.”

This is far more in line with my own point of view, but the interviewers didn’t pick him up on this apparent contradiction.

Mr Birol says:
“What we are saying is we could have a supply crunch to 2015 if we do not see enough investments coming to the markets, if we do not see production growing at a level to compensate the declines and meet the demand, and if the oil demand growth is not dampened in the OECD countries, China and India.”

Just for argument we could assign a 90% probability that there will be enough investment; 90% probability that production will grow faster than decline; and 90% probability that demand will be damped. The collective probability of all three events happening is only 73%.

You are welcome to adjust the investment probability as you wish to account for what Matt Simmons has said about the rusting and greying of oil sector infrastructure and human capital. And you can adjust the other factors also depending on your views.

But throw in additional factors such as weather and wars to make the contingency list grow longer, and it appears that the statement that a crunch by 2015 will be attributed solely to above ground factors has an ironic truthfulness.