The physics of the system tends to keep oil prices lower than heavy oil producers would prefer.
If oil is very heavy, as is the oil from the Oil Sands of Canada, it needs to be mixed with an appropriate diluent to be shipped by pipeline.
Heavy oil, especially very heavy oil, often needs to be "Cracked" in a refinery to provide a desirable mix of end products, including diesel, jet fuel, and gasoline.
Many people believe that the high level of "Proved Oil Reserves" worldwide makes it certain that businesses can extract as much oil as they would like in the future.
Even if the reserves are fairly reported, will the country have the resources to extract these reserves? Venezuela reports the highest oil reserves in the world thanks to its heavy oil in the Orinoco Belt, but it extracts a relatively small amount per year.
If private oil companies look at the true prospects and find them too bleak, they will likely use their profits to buy back the shares of their own oil companies instead. It is easy for people to assume that any part of the oil mix is substitutable for another part, but this is not true.
If oil prices rise again, I wonder whether the EU will be forced to cut back on its oil imports, essentially because of the Maximum Power Principle.
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