The world’s oil prices have stayed high since 2010 — bouncing around $100 per barrel — for two basic reasons. Oil demand keeps rising, and production is struggling to keep up. But why is production struggling to keep up? One big factor has been geopolitical conflict. Wars, unrest, and sabotage have increasingly plagued oil producers like Iraq , Libya , and Syria since 2011. The US and EU sanctions on Iran’s oil industry have also removed a lot of oil from global markets. All told, some 3.3 million barrels of oil per day — equivalent to nearly 4 percent of global supply — are currently offline due to “unplanned outages”: Hamilton, 2014 The chart above comes from a new paper (pdf) by James Hamilton, an economist who studies oil at the University of California, San Diego. He argues that the oil markets have changed dramatically in recent years — and […]