Friday, October 28, 2005

A secret U.S. intelligence report has raised the possibility that Saudi Arabia is tapped out.

The U.S. has relied on the Saudi government to provide crisis management of oil supplies, and until recently the Saudis had been able to meet expectations. But U.S. intelligence now doubts that the Saudis can continue in this role. Saudi Arabia's capacity now stands at about 11 million barrels a day. The Saudis pump about 9.5 million barrels, leaving a cushion of about 1.5 million barrels, mostly of heavier grades not very usable in the West.

A senior intelligence official, who insisted on remaining anonymous because he was not permitted to speak publicly on the issue, said that the Saudi plans to increase production by nearly 14 percent in the next four years were not enough to meet global demand. Even the Energy Information Administration recently scaled back its expectations of how much more oil the Saudis could pump in 20 years.

Echoing Matt Simmon's book "Twilight In the Desert," which projects that Saudi reserves are running out, a report by the National Intelligence Council questioned the validity of the official estimates of Saudi reserves. Additionally, Edward O. Price Jr., the former head of exploration for Saudi Aramco and an adviser to the United States government on Persian Gulf oil during both Iraq wars, questioned future reliance on Saudi capacity in an article in The New York Times last year and wanted to know from his former colleagues how they reached their estimate of more than 150 billion barrels of extra oil. Twenty years ago, a detailed study by geologists from four large American oil companies then in partnership with Aramco found little in the way of undiscovered oil resources, he said.


At 4:38 AM, Blogger Ingrid J. Jones said...

Tim, If you go into your Settings and then Comments, you can activate comment verification to stop spam comments.

In my latest post at Sudan Watch I have a link to an initiative by Lord May of the Royal Society that you may be interested in reading.

Kind regards from England, UK


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