The Guardian has a story up based on WikiLeaks acquired cables from the US ambassador of Saudi Arabia to the State Department that report Saudi oil reserves may be overstated by 40%.
From the story:
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 source of the estimate is a Saudi oil geologist:
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.
In refuting Aramco oil reserve claims a cable noted al-Husseini stated:
"Al-Husseini disagrees with this analysis, believing Aramco's reserves are overstated by as much as 300bn barrels. In his view once 50% of original proven reserves has been reached ... a steady output in decline will ensue and no amount of effort will be able to stop it. He believes that what will result is a plateau in total output that will last approximately 15 years followed by decreasing output."
Al-Husseini thought global Peak Oil production would come in 2012. I’ve also read that Peak Oil has already occurred. These cables were suggesting the smaller oil reserves meant Saudi Arabia would lose its ability to keep a lid on the price of oil. Oil’s going to get a lot more expensive, and it’s going to get a lot more expensive sooner rather than later.
Zero Hedge has a blog entry up on this story:
In what can be the "Holy Grail" moment for the peak oil movement, Wikileaks has just released 4 cables that may confirm that as broadly speculated by the peak oil "fringe", the theories about an imminent crude crunch may be in fact true.
ZH is pretty good about being doomy and gloomy about these kinds of stories, and they suggest that this might have an immediate impact on the price of oil.
We’ll see, but this probably means that the day of $10 or $15 a gallon of gasoline is coming sooner than you think.
ZH's story has links to four State Department cables:
http://www.zerohedge.com/...
The Guardian story:
http://www.guardian.co.uk/...