WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices

The Guardian ^ | 2/8/2011 | John Vidal

[ErnstStavroBlofeld]

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".

[ErnstStavroBlofeld]

If the Saudi Oil people told the US Consulate then he/she is reporting the State Department, why lie? So far, Wikileaks has turned out correct of backing up circumstancial evidence.

[FReepaholic]

...Why would the U.S counsel lie on a diplomatic cable to the State Department?...

Did I say the State Dept. lied?

[FReepaholic]

...Standard argument of the “give me something for nothing” liberal whinner...

That's "whiner".

[spetznaz]

The sheer importance of this ONE Wikileak cannot be over-emphasized! If what it is saying is the case (and there is no reason for it not to be), then what we are seeing is basically peak oil. The long-term strategic impact of that, should it be the case, is not the best of news, and unfortunately it would progressively get bad before it got better. There are so many things we take for granted. So many things.

[mountainfolk]

From what I just heard on FOX, the situation is more likely that Saudi Arabia will not, rather than cannot, pump enough oil to keep a lid on prices. Bill Hemmer had a FOX analyst on who said that even if the Saudis have only over a 100 yr supply of oil reserves instead of 200 yrs, they are finding more oil all the time. He said it was production, not reserves that should be the focus of the discussion. Also, the US has plenty of oil to take care of our country and that is where we should be getting our oil. Drill here, now. It is obvious to most of us that there is a conspiracy to keep prices high for the benefit of any number of individuals/countries who want to be and stay rich. It is equally obvious that there is something radically wrong with our govt unnecessarily and deliberately diverting food crops to make artificial fuel when doing so has increased food prices around the world. We are being sand bagged by our own country and it will not stop until the voters get new management, from state govt to federal govt.

[thackney]

The Bakken field is being drilled and produced. It has been for several years. North Dakota is already the 4th top oil producing state and will soon be 3rd.

[MasterGunner01]

My understanding, and I could be mistaken, is the Bakken Field was even larger than first thought. However, Interior is withholding leases or permits for even more development.

The evil Enviros want to bring America back to some kind of pre-Industrial Revolution nirvana. They really have NO clue at all what that would mean, especially since most of them live in rat high rises in large metro areas. They are a bunch of Luddites railing against technology and progress that allows people to live the comfortable lives we do.

[thackney]

My understanding, and I could be mistaken, is the Bakken Field was even larger than first thought.

True, but don't confuse the total oil in place with economically, technically produceable reserves. What is being produced now is layers of oil between the actual shale, not the shale itself.

However, Interior is withholding leases or permits for even more development.

Not true. The Bakken and underlying South Fork are mostly on private lands and not subject to the Department of the Interior like ANWR for example.

Only Texas, Louisiana and Oklahoma have more active rigs than North Dakota at this time.

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

[longtermmemmory]

who is this anonymous source?

is this just another price inflating manipulation story?

[ErnstStavroBlofeld]

If you have bothered to have read the article, you would seen this paragraph:

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

[ErnstStavroBlofeld]

I know you did not say that. Stop playing silly games.

[FReepaholic]

...Standard argument of the “give me something for nothing” liberal whinner...Speculators have to have a basis for speculation, or it falls flat...

The report on the death of the ruler of the world's largest oil supplier made oil prices jump as much as $1 per barrel on Thursday

Riiiight.

[editor-surveyor]

You just proved my point quite well.