Terrorism, Political Peak Oil And One Bad Dream

Here's how terrorism and political peak oil play out in the real world.

A 23-year-old worker on an oil rig has a dream. In it, there is a bomb. She tells her coworkers and, according to accounts in the British Press, the floating hotel beside a North Sea oil rig is evacuated.

A military response, hundreds of evacuees and nearly $1 million later, everyone acknowledges that the scare was a fantasy, and life on the front lines of oil production return to shaky normal.

The background of this very real episode is terrorism and peak oil. Terrorism because it puts a fear in the back of the minds of anyone living in or working on the underpinnings of a modern Western economy. Peak oil because the supply of oil is tight – and whether or not production has peaked – it's tight enough that any political turmoil tends to upset prices. We call that political peak oil.

At this point, the lagging U.S. economy is the main factor in oil prices, which are declining.

We've seen the mere threat of violence send prices spiraling upward. It's not a stretch to think of this dream doing the same.

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