Does Saudi Arabia Not Have Enough Oil?

 A seemingly innocuous question has come out the Wikileaks cables. Apparently some in the US are concerned that the Saudi kingdom overstated that country's reserves of crude oil. This could severely crimp oil prices and cause an increase of prices.

One estimate of the over-analysis places the number at 40%.

It went on: "In a presentation, Abdallah al-Saif, current Aramco senior vice-president for exploration, reported that Aramco has 716bn barrels of total reserves, of which 51% are recoverable, and that in 20 years Aramco will have 900bn barrels of reserves.

"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."

Now would this be good or bad news?

Please bookmark!