Thursday, August 26, 2004

The Implications of Saudi Arabian Oil Declining

Forget Michael Moore's rather naive and xenophobic take on the House of Saud. Saudi Arabia has severe internal problems--a rift dividing the royal house, public dissatisfaction with state policies that is fueled by Wahhabist extremists, and an increasing level of terrorist attacks. The regime is also under a good deal of outside pressure to uphold human rights and democratize its political system.

With the world's largest oil reserves, Saudi Arabia has been able to occupy a privileged place among nations, quell internal unrest, and resist outside pressure to change that would have toppled poorer countries' regimes. But Saudi oil is running out, not 50 years from now, as Arabian spokemen would suggest, but imminently, according to a report by energy expert Matthew Simmons. Simmons presented this paper at a conference held by the Hudson Institute's Center for Middle East Policy on July 9 2004. The implications for the economy of the United States, which relies on its consumption of 25% of the world's oil supply, are serious, needless to say.

Thanks to Professor M. A. Pierce for the link to this article.