ANOTHER INCONVENIENT TRUTH

Next, let us turn to Saudi Arabia. It is interesting to note that despite their highly- advertised reserves of 270 billion barrels, Saudi oil production has in fact fallen since 2004 and is still below the record-output achieved in 1981. It is not as if the Saudis do not have an incentive to produce oil when it is trading above $60 per barrel. So, you have to wonder why the Saudi’s have failed to maintain let alone increase their oil production.

It is no secret that all of the “super-giant” oil fields in Saudi Arabia were discovered several decades ago and are very mature. Some geologists claim that these oil fields are now in a permanent state of decline and the national oil company (Saudi Aramco) is taking desperate measures (injecting massive quantities of water) in order to maintain the pressure in their oil fields. If this assessment proves to be correct, we are in trouble.

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