But by then the oil shortage of the 1920s had turned into an oil glut, thanks to new discoveries in places like east Texas.
Vahan Janjigian , editor of Forbes Growth Investor, believes the likely short-term consequence of a successful regime change in Iraq would be an oil glut--not a shortage.
In May, Enbridge, a Canadian company, reversed the flow of a big North American oil pipeline, sending a glut of oil from America's northern plains southward to coastal refineries.
Now that the glut of oil parked in the Midwest will move to the Coast, sentiment improved and WTI pricing moved more in line with Brent crude.
And this one is important because of the reasons I just mentioned -- the bottleneck that exists, the glut of oil that exists, and we need to get that oil to the state-of-the-art refineries in the Gulf and get it to market.
You all, of course, are familiar with the Cushing-to-the-Gulf pipeline, why that is necessary -- because we have actually a glut of oil that's bottled up because of the lack of infrastructure necessary to move the product to the Gulf, to the refineries there.
The cartel was created to stablize oil prices when there was a glut of supply.
The major reason these stocks have performed so well is that there is a glut of domestically produced oil that is pushing down the price refiners have to pay for their feedstock thus widening their margins.
Giving the Canadian oil easier access to the Gulf means the glut in the Midwest goes away, making it more expensive for the region, but it would increase the amount of that oil available to global markets.
That glut exists in part because of the increase in oil production domestically in this country over the last eight years.
It will be hard to ignore the compelling symbiotic relationship between a glut of cheap North American gas and abundant heavy oil.
FORBES: Egypt fallout -- follow Exxon and T Boone Pickens; go long natural gas and frack-baby-frack
America needs to reduce its reliance on foreign petroleum, but growing oil production here at home will come hand-in-hand with an even larger glut of associated gas and even lower gas prices.
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