Even the Saudis Are Calling for Conservation

There is a fascinating article in the Seattle Times this morning, "Saudis worry that oil demand could outstrip vast resources". The Saudis are saying, without any equivocation, that they will not be able to meet world oil demand. My suspicion is that this is because we have, in fact, reached global oil peak. Some choice quotes from the article:

"The current out-of-control demand is not good for us," Ghazi Al-Rawi, head of private equity at Gulf One Investment Bank, said in a recent interview. "When you have this kind of demand, you're forced to supply beyond the optimal rate. That's not a positive thing."

"Can [global consumers] afford to keep increasing demand by almost 2 million barrels a day each year? Is it Saudi Arabia's role to meet that demand?" asked al-Husseini, who retired in 2004 after working 32 years in the kingdom's oil sector. "You're leading yourself to having to find an alternative source of energy very quickly."

When demand for gasoline surges in the U.S. this summer, the effect on prices should prove very interesting, given the Saudis' inability to increase production.