The newest revelations by Wikileaks states US concern for Saudi oil. US believe that Saudi Arabia, the largest crude oil exporter might not have enough oil to prevent escalating prices.
The cables’ are dated back to 2007 where a senior oil executive of Saudi government urged the US government to take necessary actions as Saudia’s oil reserves might be overstated by as much as 40% (300 billion barrels).
The revelation moves around Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, and US officials. Husseini said that Saudi oil reserves may reach an output of 12m barrels a day in the next 10 years – by 2012 probably. Global oil production would have hit its highest point which is known as “peak oil“.
In layman terms, Husseini wants us to believe that Saudi Arabia won’t be able to continue producing at the current rate of 12.5 million barrels a day, and that the Kingdom does not have as much oil left as it wants everyone to believe.
This doesn’t mean that world is running out of oil, but meeting the demand and supply can be predicted to be tough. All these revelations indicate that price won’t remain as low as they are currently. If you recall the discussion on oil prices by the three stooges of Top Gear, oil prices will keep on increasing as it is getting tougher and tougher to extract oil.