According to porter's five forces model, an oil producer will have increased if the supply of oil drops sharply.

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According to Porter's five forces model, an oil producer will have increased bargaining power if the supply of oil drops sharply.

The Porter's five forces model is a strategical model proposed by Michael Porter from Harvard. According to Porter, analyzing this forces should help in developing business strategies. The forces are:

1) Bargaining Power of Buyers
2) Bargaining Power of Suppliers
3) Threat of New Entrants
4) Threat of Substitutes
5) Industry Rivalry

According to these five forces, when the oil supply drops, the Bargaining Power of Buyers decreases because they need the little supply that is available, increasing Bargaining Power for the producer. 

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