Tuesday Energy Post: Have the Saudis and OPEC been “hiding the decline”?

08 Feb 2011 10:44 pm
Posted by: Donna

I wonder if the intrepid climate change skeptics who got all bunched up over some leaked emails are going to get equally exercised over this?

The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco’s 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as “peak oil”.

3 Comments

  1. Comment by Alan Scott on February 12, 2011 8:52 pm

    ” Aramco’s 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.”

    Another argument for more US oil production .

  2. Comment by Tyler on September 19, 2011 9:39 pm

    Howdy! This is kind of off topic but I need some guidance from an established blog. Is it hard to set up your own blog? I’m not very techincal but I can figure things out pretty fast. I’m thinking about making my own but I’m not sure where to start. Do you have any points or suggestions? Thank you

  3. Comment by Sainath on February 8, 2012 6:30 pm

    I just dreocvsied your blog. Thank you for the timely info on a very important topic, which is often overlooked, unfortunately. Every driver, every consumer-of-energy in the U.S. needs to be aware of our diminishing hold on foreign oil stocks. Thank you for getting the message “out there.”

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