10 September, 2007
Ministers from the 12 OPEC [see also Wikipedia] countries are expected to be holding their official production output steady when they meet tomorrow in Vienna. Currently OPEC produces about 27 million barrels of oil per day but the International Energy Agency has been pushing them to bring more oil to the market. OPEC, on the other hand claims that there is enough oil on the market to meet demand and is also concerned that the financial crisis in the US could even lead to a slowdown of demand.
For some energy experts on the other hand, the question is not: will it, but can it? Some OPEC watchers think that, except for Iraq (which faces other problems), the OPEC countries have very little spare capacity. According to some, only Saudi Arabia would be able to produce more oil if necessary but even that is being questioned by people like Matthew Simmons who in his book Twilight in the Desert has made a very pessimistic analysis of the Saudi reserves. Along the same lines, the Oil Drum blog has some excellent analyses of the depletion rates at the world’s biggest oil field, the Saudi Ghawar field. It is generally accepted that if Ghawar has started peaking, the whole world production will have started its decline.
- Washington Post: OPEC Appears Unlikely to Increase Its Oil Export Quotas
- Financial Times: Subprime crisis gives Opec dilemma
- Gulf Daily News: Opec in dilemma as oil prices approach $80