Saudi Arabia is privately warning European and U.S. energy officials that the Organization of Petroleum Exporting Countries (OPEC) can't meet the world's projected demand for oil, the Financial Times reported in July. The International Energy Agency projected that the oil cartel would have to boost production from current levels of 30 million to 50 million barrels per day by 2020 to meet demand. The Saudis say OPEC will fall short of that by 4.5 million barrels per day.
As the world's biggest oil producer with the world's largest reserves, Saudi Arabia has been widely seen as the source that could best meet rising global oil demand. However, energy investor Matthew Simmons warns in his recent book, Twilight in the Desert
, that Saudi Arabia is at or near the peak of its production. He argues that Saudi Arabia's giant oil fields are 40 to 50 years old, are becoming depleted, and continue to produce at high levels only because the Saudis have begun using secondary recovery methods, including water injection.
by Carolyn McConnellThe Financial Times article is available at www.energybulletin.net/.