The Jihad Put

[phirang]

When I read about bush's humiliation in Saudi, I immediately wondered what options the US would consider to secure a more tractable "ally"... and then I realized the genius of the saudis: by making their population so viruently anti-US/western, any effort by the US to foist a fresh(the current lot are stale, see!) tin-hat despot upon KSA would plunge the nation into internecine civil war, thereby shooting oil to 200+/bbl easily, and thereby crashing the US economy: victory for saudi.

it's no coincidence that the schools there teach what they do...

[Olduvai]

Another reason is they simply can't pump more at short notice.
Production could be increased only by investing heavily on hardware.
This is not in their interest as prices will spike more in the future.
Each barrel not sold today can be sold in a few years time at double the price. So pumping as little as possible is sound investment for the Saudies.

They are also planning to create their (Middle Eastern Opec) own oil-currency being non-USD. All the signs point to a course away from the US and towards India and China.
http://www.meforum.org/article/1019
As for future western influence these are "writings on the wall".

[phirang]

Another reason is they simply can't pump more at short notice.
Production could be increased only by investing heavily on hardware.
This is not in their interest as prices will spike more in the future.
Each barrel not sold today can be sold in a few years time at double the price. So pumping as little as possible is sound investment for the Saudies.

They are also planning to create their (Middle Eastern Opec) own oil-currency being non-USD. All the signs point to a course away from the US and towards India and China.
http://www.meforum.org/article/1019
As for future western influence these are "writings on the wall".

hence the oil rally in response to the news...

[GRG55]

Another reason is they simply can't pump more at short notice.
Production could be increased only by investing heavily on hardware.
This is not in their interest as prices will spike more in the future.
Each barrel not sold today can be sold in a few years time at double the price. So pumping as little as possible is sound investment for the Saudies.

They are also planning to create their (Middle Eastern Opec) own oil-currency being non-USD. All the signs point to a course away from the US and towards India and China.
http://www.meforum.org/article/1019
As for future western influence these are "writings on the wall".

Using your logic then, they should just shut it all in.

Have a look at how much Aramco has been investing. You may be surprised. Even more surprising is how little incremental light oil is resulting from this effort. The "easiest" oil for Saudi to add (measured by barrels/day of new production) is now the hard-to-refine stuff like Manifa heavy and similar.

[Olduvai]

Using your logic then, they should just shut it all in.

Have a look at how much Aramco has been investing. You may be surprised. Even more surprising is how little incremental light oil is resulting from this effort. The "easiest" oil for Saudi to add (measured by barrels/day of new production) is now the hard-to-refine stuff like Manifa heavy and similar.
Easy light crude findings are history (from known Saudie wells).
But real Saudie reserves as well as possible historical findings are kept under wraps very carefully by the Saudies.
I think they have got some unpublished reserves they want to hold for the future. Otherwise the wheeling and dealing with India and China don't make much sense if they can't deliver.
All I can notice is a current Saudie trend from the west to the east.

[GRG55]

Easy light crude findings are history (from known Saudie wells).
But real Saudie reserves as well as possible historical findings are kept under wraps very carefully by the Saudies.
I think they have got some unpublished reserves they want to hold for the future. Otherwise the wheeling and dealing with India and China don't make much sense if they can't deliver.
All I can notice is a current Saudie trend from the west to the east.

"Nations don't have friends; nations have interests" --Lord Palmerston--

The Kingdom of Saudi Arabia, not surprisingly, is no different in this respect from any other nation...

[Shakespear]

IF, and in my opinion this is the big question, if they had the additional production to act as a swing producer (which they were able to do many years ago) they would increase production to save their allies economy. However since they are not doing it is an indicator to me that they do NOT have this spare production capacity despite increased rig count in KSA suggesting an effort to raise it. I doubt if they are holding back. Ramping up production to the max creates issues detrimental to the optimal production of a field. Hence KSA will not do it just to please Bush.

We are in a mature phase of World HC production and the future looks to offer less and less production with each passing year. Of course everyone who is not familiar with the oil industry thinks that the magic bullet will be found and all will be well. They base this on past history. However so far is happening to support that this view is a prudent one to take. If anything the data suggests we are sitting a plateau of production. Give another few years and the picture will be clearer that we are entering a declining phase of World HC production.

Already the subject of Peak Oil is being mention in MSM, so one can deduce that it has caught the attention of policy makers and is being treated as a real issue. The person on the street senses that something is wrong but has no clue the magnitude of the problem.