Saudi Arabia's Crown Prince Abdullah met with George Bush in his ranch in Crawford, TX, April 25, where unprecedentedly escalating oil prices obviously dominated the agenda. The reactionary NY Post ran a front-cover story "THE HIGH PRICE OF OIL," with prominent photos of Bush walking hand-in-hand with the prince and exchanging an "air-kiss" (as the caption put it) with him. This was, of course, portrayed as unmanly and a national humiliation, prompting predictably outraged letters [1] from lug-headed Post readers ("No, the prince should not have gotten a kiss on the cheek. He should have gotten a kick in the rear.")
An April 27 account in the independent Saudi English-language Arab News [2] quoted official oil advisor Adel al-Jubeir saying that the regime is already pumping out enough oil to meet global demand, and suggested that continued high prices (over $58 per barrel briefly in April) are rooted in causes other than insufficient production:
James Paul, executive director of the New York based-Global Policy Forum, and author of the report "Oil in Iraq: The Heart of the Crisis" (www.globalpolicy.org [3]), warned that world production is reaching its peak.
"The Bush administration would have the US public believe that there's an unlimited supply of oil and that the nasty environmentalists and greedy sheiks are keeping oil from reaching consumers. It's a catastrophic lie. There is growing consensus that worldwide oil production is reaching its peak. The Saudis are now pumping very near full capacity and all of OPEC is operating at full tilt. OPEC has been trying to lower oil prices to keep the markets stable but without success. Worldwide demand is going up and supply can't rise to meet it.
"The US is thirsty for more, the markets in China and India are growing rapidly, so market forces are driving prices higher and higher. The administration's plans for controlling Iraqi oil, and putting US and UK companies in charge, have thus far been a failure. Exxon's profits are setting new records, but the world's energy future is in chaos for which the oil giants are largely responsible," Paul said.
"What's happening is that world production is hitting its peak now, and the Energy Information Administration in the US projects that world production of petroleum will rise up to 125 million bpd by2025 , and that's way off the charts. Oil is not running out, but it is reaching its peak," said Paul.
See our last blog post [4] on Saudi Arabia's political crisis and the simple geological realities that may lie at its root.
