Oil Market Under Pressure, Supply Not Able to Counter Demand

Saudi Aramco’s current state of upstream developments is still not fully understood. Based on growing research figures provided by independent analysts, it has been shown that current depletion of Saudi oil fields are increasingly above the normal 8% to be expected. Several authors have already shown that since beginning of 2006, current depletion is more likely between 10%-14%, which is very worrying.

Overall production is under threat, as the Saudis have been forced to push forward several of their major upstream projects, planned to come on-stream in 2008-2010.

At the same time, investors should be warned that if real facts should emerge about the huge problem Saudi reserves are facing, price spikes of above US$120 per barrel will not be the dream come true for bankers only, it will be a normal fact of life.

resourceinvestor