It's worth taking a look at this chart of historical oil prices (hat tip: @zerohedge).
A quick scan of the chart suggests two stylised facts about oil prices:
- Prices typically rise because of war/geo-political tensions.
- Prices typically fall because of (i) an expansion of supply (in pre-WWII era) and (ii) an end to the war/tension coupled with a shift in demand (in post-WWII era).
Now I know this isn't always the case, but it's what I took away from a quick scan of the chart. That suggests oil prices could remain high as long as the Arab spring/Afghan & Iraq wars persist and BRIC growth drives global demand.