If you accept that the current price is an indication of a supply shortage, then we are at that point now. It is possible that there are suppliers out there who could supply much more oil but are not doing so to run the price up.

If the US decided to reduce its consumption of oil by half over five years through a rationing program, this would boost supply for the rest of the world by about 12% or so. The rest of the world would have to snap that up faster than usual to maintain prices at current levels if suppliers can not organize to restrict production. My guess is that prices would fall.

If the US can show that much discipline, I would think that some other importers would also follow suit. The reason for doing this is that no one but the US can float the blue water navy needed to secure the oil deliveries of the next decade but the US would have no interest, on its own, to do so once it no longer imports oil. Leaving oil tankers to the mercies of pirates of various sorts would make other countries consider rationing programs as well. I would guess that a world undelivered price of $10 a barrel could be achieved with adequate consumer discipline.

I don't think it makes all that much sense to maintain a reserve of oil if we are going to stop using it. The domestic supply should be adequate if we continue to reduce use going forward. Reserves are important for nations that put themselves at risk by relying on imports but they are just expensive toys for those who take their security more seriously. They could be used to destabilize supplier governments though with clever timing.

Chris