When the “Central Bank of Oil” runs dry

derrickThe blog Oil Man has commented on an article published in  the Guardian, that analyses the indiscretions of the famous site in regards to information contained in American diplomatic cables sent between 2007 and 2009. The messages reveal Washington’s concerns about Saudi Arabia’s ability to play its traditional role as the “Central Bank of Oil”, in other words, its ability to balance the price of a barrel of oil by adapting its production. The author recalls several interesting numbers: the kingdom is the largest producer in the world, with 1/5th of the global reserves and 70% of production capacity unused. Yet, it currently no longer has enough reserves to cope with the growing global demand or to contain the price of a barrel. These concerns have been intensified by the comments made by ARAMCO’s former second-in-command, Sadad al-Husseini, who has been very chatty indeed since he left his job. According to him, the kingdom’s production capacities have been over-estimated. Aramco’s production reached a “plateau” of between 9 and 12 mb/d, and is unable to exceed its current capacity of 12.19 mb/d. Even if the International Energy Agency is publishing the contrary (forecasts up to 14.6 mb/d), Americans are beginning to lose faith in their old Saudi allies.

(Picture: © Sergiy Serdyuk - Fotolia.com)