The world may be on the verge of an oil crisis, according to WikiLeaks cables released to the Guardian today. According to the cables, Sadad al-Husseini, the former head of Saudi Arabia’s state-run oil monopoly, warned diplomats that Saudi reserves were overstated by almost 40%, and that the country couldn’t reach the 12.5 million barrel-per-day production capacity needed to keep global oil prices in check. He predicted that the world would hit “peak oil” as early as 2012.
“While al-Husseini fundamentally contradicts the Aramco company line, he is no doomsday theorist,” the US consul warns in the cable. “His pedigree, experience, and outlook demand that his predictions be thoughtfully considered.” Seven months later, the embassy wrote that, while Saudi Arabia could clearly boost the price of crude, “we question whether they any longer have the power to drive prices down.” Another cable observes that “Saudi Aramco is having to run harder to stay in place—to replace the decline in existing production.”