Oil Supply Disruptions Likely - US Military

Following the Joint Operating Environment 2010 report by the US military warning of supply shortages in the oil market of up to 10 mbpd by 2015, the US Department of Defense's latest Operational Energy Strategy report to Congress has again highlighted the risk of disruptions to global oil supplies.

Page 8 of the report states:

The volatility of oil prices will continue to be a budgetary challenge for the Department, and the realities of global oil markets mean a disruption of oil supplies is plausible and increasingly likely in the coming decades. The Services have already taken steps to certify aircraft, ships, tactical vehicles, and support equipment to use alternative liquid fuels, a prudent insurance policy against future oil supply disruptions and high prices.

The reason why I think we should pay attention to what the US military says is that these people tend to take a hard, long-term view of things when it comes to assessing threats to their country.  For example, more than 20 years ago, they were already warning Congress about American foreign dependence on Rare Earth Elements technology in US weapons system.  Of course, now that risk has come to pass has China effectively controls 97% of the REE market.  Given such a track record of long-term thinking, I tend to take their views seriously.

The full OES report can be found here.