PHOTO CAPTION: Saudi Arabia King Abdullah

Has Peak Oil Arrived?

Brendan Coffey sees signs that it has in Saudi Amarco's $68 a barrel break-even point for oil extraction.

Published: 20-Jul-2010

On July 4, Saudi Arabia's King Abdullah attended a cabinet meeting and then responded to a Zawya Dow Jones Newswires reporter's question about what transpired: "I told them that I have ordered a halt to all oil explorations so part of this wealth is left for our sons and successors, God willing."

The rest of the newswire item goes on to quote from unnamed Saudi oil sources that the king didn't mean a halt to exploration, but that he simply wanted the country to be more judicious in its exploration. Other sources chimed in that Saudi Arabia is committed to its role of ensuring the world has enough oil to meet its needs. In other words, everyone was spinning the king's statement.

When I covered the oil market as a beat reporter for Dow Jones in the late 1990s and into the start of the last decade, the delicate dance of OPEC and Saudi Arabia regarding the image of oil availability became clear to me.


IEA chief economist Dr. Fatih Birol is now warning oil production is likely peak in ten years.

International Energy Agency reports the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago.

Offshore oil platform on fire in the North Sea

Despite risks, new field discoveries have kept pace with declining oil reserve production, reports Reuters, but age of cheap oil is over.

NOAA satellite of Deepwater Horizon oil spill in Gulf of Mexico late April 2010.

What's left is hard to get at and risky to extract, as Deepwater Horizon blowout shows.


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