Please note that this is only an interesting thought experiment to illustrate the huge potential for oil’s price escalation.

Assumptions:

1. Every percentage change of supply (while holding demand constant) or demand (while holding supply constant) results in roughly a 10 to 30 percent change in price. I heard that this tends to be the experience of long time commodities traders. Citation welcomed. But given that both the price elasticity of demand and supply for oil is very inelastic, this assumption sounds reasonable.