There are two things that determine the price of oil, according to Husseini.
"There's a structural factor: the cost, the difficulty of extracting oil from older fields, the reserves getting depleted...The other factor has to do with what we're seeing: the speculation, the concerns about security, the volatility. That’s probably adding 20-plus dollars to the barrel of oil today. So it should be lower, but on the other hand, these are the realities of the market. There's a lot of volatility due to non-oil-related issues."
It costs around $9 to extract a barrel of oil, but Husseini says much of the profits get plowed back into the energy industry.
"Part of that margin that we're talking about has to finance all the new facilities that are being built, and currently the total capital program that this oil is carrying is over $80 billion in Saudi Arabia alone, so that’s a massive investment. The Middle East Gulf region is investing over $700 billion in oil and refineries upstream."
The marginal cost of extracting oil, says Husseini, could easily double or triple over the next 20 years.
"The areas where there are oil basins are pretty well-known, and the balance of oil, we've used about half the [proven] oil reserves. There's another half left out there. The balance is in smaller pools, more mature fields, very deep offshore arctic regions. All of these are very expensive areas, and that will carry the base cost up."