A Wikileaks cable has reportedly revealed that Saudi Arabia may not have enough oil to stop prices from skyrocketing. That is, depending on how you define the country's oil reserves.
Cables from the U.S. embassy in Saudi capital Riyadh reviewed by the Guardian, describe a warning from a senior Saudi oil executive, who said the country's crude oil reserves have been overstated by nearly 40 percent, some 300 billion barrels.
The Guardian reports that Sadad al-Husseini, former head of exploration at the Saudi oil monopoly Aramco, told the U.S. consul general in Riyadh that the Saudi oil company could not keep up with the 12.5 million barrels a day needed to keep prices low. Peak oil, he said, could be reached as early as 2012.
But, according the Wall Street Journal's Angus Mcdowall, there's good reason to be wary of reading too much into the cables. Mcdowall spoke with al-Husseini, who told him his comments were referring to Saudi Arabia's "oil in place" -- including recoverable and non-recoverable sources. Looking at it that way, Husseini suggested to the WSJ, makes the picture a lot less frightening.
"The world of energy looks pretty much how it looked yesterday," Mcdowall writes.
The price of Brent crude oil, an industry benchmark, rose above $103 a barrel last week thanks to global demand, and tensions in the Middle East and north Africa following protests in Jordan, Tunisia and Egypt. This is the highest value since September 2008, when record oil prices helped drag the economy into recession.
A 10 percent increase in the price of oil that lasted one year could result in the loss of 270,000 American jobs, according to a simulation by IHS Insight.