The King of Saudi Arabia talks about oil; we should listen.

Summary:  One astonishing aspect of the energy crisis is the western media’s preferences when it comes to sources of information.  They love western speculators, economists, oil company executives, and politicos.  Others go to small articles in the back pages, including statements by leaders of oil producing nations – even the King of Saudi Arabia, home to the world’s largest reserves.  No wonder the American public gets surprised by every new development.

In the following interview, King Abdullah of Saudi Arabia stays on message with what the Saudi Princes have said for several years.  He has just become more explicit.  He makes two things very clear.

  1. He dashes any hope that they plan any new large new projects to expand oil production (beyond those under construction).
  2. He fires a warning shot at consuming nations that plan to raise taxes on oil – either directly or via carbon taxes.  We cannot complain that oil prices are too high and then tax it more.  If we believe higher oil prices would benefit the ecosystem, the Saudi Princes can oblige us.

Interview with King Abdullah of Saudi Arabia, Arab Times, no date (aprox 1 July 2008) — Bold emphasis added.  Excerpt:

Q: How was the meeting between the oil producing and consuming countries in Jeddah, Saudi Arabia, in which you explained in detail the effect of high oil prices on daily living?

A: During the meeting, we declared our strategies on the soaring prices of oil in the international market as well as the policies of the Kingdom. Starting from the establishment of OPEC, we have always been keen on keeping the price of oil at a normal level to reduce the burden on both the producers and consumers. Our enthusiasm to protect the interests of the international community, in terms of oil, is on par with our eagerness to protect national interests.

We have nothing to do with the rising prices of oil in the world and there might be some other factors contributing to the increase, such as a few people trying to play with the market to serve their personal interests while some countries are increasing duties on oil products, except on those which they produce locally.

Despite OPEC’s commitment to meet the growing demand for oil as well as its lack of control over the price of oil in the world – which is decided by the market, some groups still accuse the organization of causing the hike in prices of oil. The oil consuming and producing countries should look into the issue to identify the real cause.

People who think that oil prices will go down once production is raised are wrong because there are indications the prices will remain high. As an oil producing country, we are not linked to such indications or observations. We market our products in the international community based on the current prices, whether high or low.

Many countries have hinted about a decrease in current speculations but we have nothing to do with such hints as an oil producing country. Worldwide development is in the offing, hence, there is a growing demand for oil.  OPEC used to have full control over the price of oil but many consuming countries opposed it, arguing the price should be based on the law of demand and supply, to which, OPEC agreed. Still, some groups are accusing the organization of causing the increase in the prices of oil.  Is this fair?

Looking at the recent reports from the experts, I think oil will go down if there is an alternative source of energy, but the price of that energy will also increase due to the booming world economy. Prices will continue to soar as the economy flourishes because energy is a vital resource in development. Thanks to the Almighty, our region has a strong oil reserve that can meet future demands.

Some people might disagree with our point of view but we are not the target in such a situation. We are very transparent in our visions to limit the price of oil in the international market. We hope other countries will look for alternatives to help their citizens overcome their burdens caused by their need for energy like oil.

For more information about Peak Oil

  1. When will global oil production peak? Here is the answer! (1 November 2008)
  2. Links to articles and presentations of some A-team energy experts  (11 November 2008)
  3. The most dangerous form of Peak Oil  (8 April 2008)
  4. The world changed last week, with no headlines to mark the news   (25 April 2008)
  5. Peak Oil Doomsters debunked, end of civilization called off  (8 May 2008)

Here is an archive of my articles about Peak Oil.

Here are other resources about Peak Oil.

Originally posted at Fabius Maximus and reproduced here with the author’s permission.

7 Responses to "The King of Saudi Arabia talks about oil; we should listen."

  1. London Banker   July 5, 2008 at 12:58 am

    In 1999, Osama Bin Laden explained that he wanted the price of oil to rise to $144 per barrel so that citizens in oil producing countries could have an equitable proportion of oil revenues relative to the profits of oil companies and tax revenues of oil consuming states. Mission Accomplished.

  2. Clifford J. Wirth   July 5, 2008 at 9:19 am

    Hey Fabius Maximus, you’re right about the need for oil. And there are no real alternatives. Global oil production is now declining, from 85 million barrels per day to 60 million barrels per day by 2015. At the same time demand will increase 14%. This is like a 45% drop in 7 years. No one can reverse this trend, nor can we conserve our way out of this catastrophe. Because the demand for oil is so high, it will always be higher than production; thus the depletion rate will continue until all recoverable oil is extracted. We are facing the collapse of the highways that depend on diesel trucks for maintenance of bridges, cleaning culverts to avoid road washouts, snow plowing, roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, transformers, steel for pylons, and high tension cables, all from far away. With the highways out, there will be no food coming in from "outside," and without the power grid virtually nothing works, including home heating, pumping of gasoline and diesel, airports, communications, and automated systems. This is documented in a free 45 page report that can be downloaded, website posted, distributed, and emailed:

  3. ccpo   July 5, 2008 at 7:35 pm

    The king is not being truthful. From 2005 to 2007, SA reduced its output by around a million barrels of oil a day. They created greater scarcity. To say they had nothing to do with it is, literally, a lie. The real question is why did they do this? Prior to 2005 OPEC had always moved to keep prices lower than would allow the development of alternatives. Why are they now **supporting** prices that make virtually any alternative worth trying? The short answer is they have no choice. Declining production from existing wells, the high cost of keeping production up with enhanced extraction techniques and the lack of new discoveries equals a SA that literally cannot just turn on the spigot any longer. That is, they don’t have the ability to produce significantly more. They have said this. They have stated they are **working** to increase capacity, not that they **have** capacity. Peak Oil, friends. Welcome to a whole new world.

  4. MAHMOUD TAVANGAR   August 3, 2008 at 6:09 am