Comments on: Are the Saudis running out of oil?

By: diego

diego — Tue, 06 Mar 2007 21:08:17 +0000

Exciting times indeed!.

By: diego

diego — Tue, 06 Mar 2007 20:54:36 +0000

Exciting times, indeed.

By: John Burgess

John Burgess — Mon, 05 Mar 2007 18:00:03 +0000

It's either serendipity or Dave has a source deep inside The New York Times! Today, The Times runs a piece: Oil Innovations Pump New Life Into Old Wells that speaks to the very issue. There's a nice graphic on the page that illustrates Saudi reserves. The piece notes that as the price of oil increases, so do the reserves--a theory well demonstrated by Julian Simon in his bet with Paul Ehrlich in 1980. The bottom line: given anticipated breakthroughs in technology and the right price, the KSA might be holding as much as 1 trillion barrels, roughly 10 times current reserves.

By: Dave Schuler

Dave Schuler — Mon, 05 Mar 2007 13:35:14 +0000

I tend to believe that “energy independence” is a bit of a will o' the wisp, Jim. There's a global market for oil and it operates with remarkable efficiency. The same is true for coal, gas, and uranium. Even if we went totally to wind, solar, or geothermal we'd still be influenced by global energy markets.

The only way to achieve complete energy independence is through a policy of autarky which has been a disaster for every country that's tried it.

By: author name eaten

author name eaten — Mon, 05 Mar 2007 12:19:14 +0000

I think we should avoid too much schadenfreude at this news. The Saud family doesn’t have anything to worry about nor do other wealthy families in the KSA. They’ve used the oil money to buy a lot of other assets. And wealthy Saudis who are inclined to fund terrorism will continue to have plenty of money to do it with.

Moved from wrong thread. - jhj

By: Jim Henley

Jim Henley — Mon, 05 Mar 2007 12:16:12 +0000

Most people in the KSA don’t belong to those families and, if growth slows, they may be in very dire straits indeed. IMO that will produce more radical Islamism not less.

Gosh but this would call into question the very logic of striving for "energy independence" as a blow against terrorism.

By: mariergaudette

mariergaudette — Mon, 05 Mar 2007 06:12:04 +0000

I think this supported by the efforts of both the Chinese and Indians over the last year to lock in oil sales directly with the KSA.

By: jeff b

jeff b — Mon, 05 Mar 2007 01:50:39 +0000

Are the Saudis running out of oil? Yes. They keep pumping it out of the ground, so they must be running out. Next question.

By: John Burgess

John Burgess — Sun, 04 Mar 2007 22:22:05 +0000

But demand is also seasonal. When it was expected that winter would be extremely cold, prices went up. When winter turned out to be mild, they dropped. When there was suddenly a lot of snow, prices were up again.

The supply of oil is only one of the factors that affect the price. Increasingly, it seems like one of the smaller factors as marketers and those who try to play the market inject their own costs.

By: Edgardo

Edgardo — Sun, 04 Mar 2007 19:57:29 +0000

If the world demand had been growing explosively, prices would have continued increasing.

By: John Burgess

John Burgess — Sun, 04 Mar 2007 19:35:33 +0000

I guess it's easy to dismiss it as 'taqqiya', but the Saudis are claiming not only new oil fields, but also new unproven reserves. Edgardo: The oil price rises we've seen are far better and more easily explained by the explosive growth in demand by China and India than by the KSA's running low. I think this supported by the efforts of both the Chinese and Indians over the last year to lock in oil sales directly with the KSA. If people are waiting for the KSA to collapse because it's running out of oil, they're going to have to wait quite a while.

By: Edgardo

Edgardo — Sun, 04 Mar 2007 18:32:34 +0000

Dave,
I'm surprised that neither the posts you refer to nor your post discuss the current prices of oil. The relevant question is whether current prices are reflecting a level of Saudi oil reserves lower than just a few years ago. Given that for a few months oil prices had been above their current values, one might argue that it was due to a sudden doubt about the level of Saudi reserves and the subsequent drop of prices to the realization that these reserves are enough to keep prices at the new levels. Indeed a serious analysis should take account of other forces but they were not discussed in the posts you refer to. I cannot understand a market analysis that does not discuss prices.

By: The Glittering Eye » Blog Archive » Are the Saudis running out of oi?

The Glittering Eye » Blog Archive » Are the Saudis running out of oi? — Sun, 04 Mar 2007 16:23:58 +0000

[...] I’ve got a post up about decreasing Saudi oil production at Outside the Beltway. [...]