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Twilight in the Desert

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Twilight in the Desert

The Coming Saudi Oil Shock and the World Economy

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

Saudi Arabia`s oil is not infinite, but energy expectations are. Why isn`t society preparing for Saudi oil`s sunset?

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Editorial Rating

9

Qualities

  • Innovative

Recommendation

Author and leading oil expert Matthew R. Simmons departs from other books of the oil doom-and-gloom genre, which usually review peak production formulas, extend them to global oil reserves and posit an inevitable decline. Global oil production, they all warn, must begin to diminish "sooner or later." While indisputably true, such homilies overlook the core question: when? When will the decline actually begin - now or 50 years from now? (As John Maynard Keynes put it darkly, "In the long run, we’re all dead.") Taking quite a different tact, Simmons ignores the bit players and focuses on Saudi Arabia, the world’s petroleum giant. He links historical data with solid information and graphs on oil reserves and production, and adds his informed perspective on how the oil business really works. No wonder the house of Saud reportedly spent an entire year priming its public relations network to defuse this book’s thesis. By sticking to facts and avoiding prognostication, Simmons makes a cogent case that it’s time for the world to start working on "Plan B," that is, what to do once Saudi production declines. getAbstract.com recommends this book to all business readers. As the lifeblood of the global economy, oil is everyone’s business.

Summary

The Oil Spigot

For countries counting on the seemingly endless supply of petroleum that flows from Saudi Arabia, thoughts of its dwindling oil production are unwelcome indeed. The fact is that just six giant Saudi fields produce the vast majority of its oil. Those fields are all mature - they have been producing oil at a very high rate for almost half a century now. The Saudis already inject massive amounts of water into their underground reservoirs to maintain well pressures.

The Middle East is believed to possess about 63% of all of the world’s oil. Perhaps a more staggering statistic is that Saudi Arabia’s proven oil reserves apparently account for about 23% of all known petroleum reserves in the world - some 262 billion barrels. Perhaps this abundance of oil explains why most observers have never given much thought to the possibility that the Saudi oil feast might end soon - or to the consequences if it does.

Saudi world oil hegemony began on a specific day in history: January 15, 1902, the day Abdul Aziz assembled a battalion of warriors to capture Riyadh. Until then, the Rashid Arab clan, which was allied with the fading Ottoman Empire, ruled the land now...

About the Author

Energy expert Matthew R. Simmons is the chairman and CEO of an investment bank that specializes in energy industry projects. He is also a member of the National Petroleum Council, the Council on Foreign Relations, and the Atlantic Council of the United States.

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