I agree with the Saudi Oil Minister who says they have plenty of oil; even though Saudi Arabia may one day sell all its oil, the oil reserves of the world will never be depleted, thanks to market forces and aside from any technological innovation. I wonder though: what advantage does Saudi Arabia gain from trumpeting its wealth? The scarcer oil is, the higher its price, so why reassure people that oil is plentious?
WASHINGTON -- Saudi Arabia has plenty of oil _ more than the world is likely to need _ along with an increasing ability to refine crude oil into gasoline and other products before selling it overseas, a top Saudi official says.
"The world is more likely to run out of uses for oil than Saudi Arabia is going to run out of oil," Adel al-Jubeir, top foreign policy adviser for Saudi Arabia's de facto ruler Crown Prince Abdullah, said Wednesday. ...
High oil prices benefit the Saudi economy in the short run, but al-Jubeir said his nation wants a stable price that won't hurt consumers so much that they reduce their energy demands.
Maybe that's the real problem then. The Saudis are the world's largest oil producers -- and have the lowest production costs -- but they don't have the ability to increase production volume enough to take advantage of surging demand and high prices. If they can push prices down, they can put their competition out of business because their competitors can't produce oil for the same low cost the Saudis can. Not only that, but as al-Jubeir said, lower oil costs will reduce the incentive for consumers to move to alternate fuels.
Then again William Tucker and Matthew R. Simmons think the Saudis are lying, or deceived themselves.