Prices are in a range that most producers as well as consumers term as fair and indeed acceptable. The global economy can sustain the current price levels and, at the same time, it is conducive enough to attract investments.

Indeed there are voices, on both sides of the spectrum, not at ease with the current levels. There are people who see the current price level as either not attractive enough or too high, depending upon which side of the divide they are from.

Yet in the medium to long run, pressure seems to be building up on crude and a number of factors are contributing to it. That is not a good omen for the overall health of the industry.

Despite the fact that the global crude spare capacity is touching almost the six-million-barrels-a-day mark and new crude frontiers appear in plenty all around, resulting in a glut like situation in the market, the “Peak Oil” debate fails to die down. This is frightening!

The common consumer is confused and so are many pundits. This is irritating to the industry and could have long-term consequences.

The stress and emphasis on alternatives is increasing with the passage of time. The climate change debate is gaining strength and there are people who have started to feel that the entire debate has political connotations. When Aramco CEO Khaled Al-Falih points out and questions the logic behind the four and a half percent consumption growth in coal as compared to one and a half percent in crude oil, in this era of environmental awareness, he has a point to make.

The issue of energy efficiency has taken centre stage and all the indications are that in the years to come, even if the absolute consumption of crude may not go down or else even rise, its role in driving the wheels of industry would definitely get compromised.

Global growth in consumption, even in the absolute perspective, is to a great extent dependent on the emerging scenario in Asia with China as the major driver.

Much would depend on China, most agree. Despite what is often termed as Beijing’s unquenchable crude thirst, there are variables that might adversely impact Chinese crude consumption growth in the years to come.

The world has also entered a gas glut era. Shale gas developments in North America and other parts of the world are changing the rules of the games. The newly found gas is definitely going to compete against crude one could say with certainty.

To top it all, global economic uncertainty is also impacting the global energy balance in a significant manner. The world is not sure how the global economy is shaping up in the near term. There are question marks: if the current global economic recovery is there to stay, or we are headed for the second phase of the anticipated “double dip” recession. Energy consumption would depend to a large extent on the state of the global economy.

We are currently in for a difficult scenario. Crude demand destruction has occurred — none can deny. No one is sure if any demand recovery would actually take place in the near future. Demand in the industrialized world has already peaked. In the emerging economies too, things are still uncertain — due to a host of reasons — from the economy to environment.

In these perplexing circumstances, the very idea of “demand security” has assumed still greater dimensions. Without demand security, investors in the industry — both in the public as well as the private sector — would find it difficult to invest in the sector, one can’t argue.

This is despite the fact that trillions of dollars are required to be invested in the industry, if it has to meet the future call on crude. The emerging scenario is dissuading investors from getting into the sector with deep pockets. This is frightening in the real sense for the very welfare and future of this crude-driven civilization could be at stake.

One thing is certain. Despite all that is being said and pleaded, the world would still need crude in the future.

If the markets continue to give mixed and confusing signals, as it is emitting today, this crude dependent world could be in for major chaos in the years and decades to come.