Given that Matt Simmons has been vindicated in that a US diplomat convinced by Saudi expert that reserves of world’s biggest oil exporter have been overstated by nearly 40%, this means:
-Saudi Arabia becomes just another Arab country; without the ability to be the OPEC stabilizer they are no longer a key for the US in the region. So the US should stop coddling/protecting them
-this provides support for continued exploration for new fields, such as the Brasil find recently. Crude prices won’t suddenly crumble due to SA opening up the spigot. Floor price for crude much higher, like $20 a barrel or so; much more than when SA’s marginal cost per barrel was like $6
-price support for alternative oil sources (sands) and things like biodiesel, biomass digesters, and nuclear.
Reports by British organization on Wikileaks cables
- Saudi oil company oversold ability to increase production, embassy told
- Saudi Arabia tackles western shift towards energy independence
- US queries Saudi Arabia’s influence over oil prices
- US concern over Saudi Arabia oil production
