Twilight in the Desert

With over 260 billion barrels of proven oil reserves, a quarter of the world's total, Saudi Arabia is not only the top foreign supplier to the world's largest energy consumer – the United States -- but also essentially the sole source of liquidity in the world oil market. According to the Department of Energy's Energy Information Administration (EIA), the world will become more dependent upon Saudi Arabian oil in the next two decades. To meet global demand for oil, Saudi Arabia will need to produce 13.6 million barrels a day (mbd) by 2010 and 19.5 mbd by 2020. Both the International Energy Agency and EIA assume Saudi oil output will double over the next 15 to 20 years.

Matthew R. Simmons, Chairman of the Simmons & Company International, a specialized energy investment banking firm, and author of Twilight in the Desert, contends that this is unlikely. He argues that Saudi Arabia's oil fields now are in decline, that the country will not be able to satisfy the world's thirst for oil in coming years and that its capacity will not climb much higher than its current capacity of 10mbd. Considering the growth in demand, this could easily spark a global energy and economic crisis.