2006 average production level decrease precipitous 8%;
Does the US see its Iraq project as a sort of replacement OPEC?
Monthly Saudi production levels for 2006, assembled by Stuart Staniford at The Oil Drum
Here is another major story about oil that has received no ink in the mainstream press: According to data from official sources, oil production in Saudi Arabia has been declining since the beginning of 2006.
Stuart Staniford at The Oil Drum has written a very careful analysis, citing key news stories about production in specific Saudi fields. Staniford unpacks recent Saudi press releases suggesting production cuts have been intentional.
Staniford writes, "The entire 'production cut' may be a public relations exercise to disguise other processes."
In my own analysis, this story suggests there is yet another nail in the coffin containing Saudi's history as the world's swing oil producer. Staniford bets against Saudi posturing that it will optimize "upstream operations, and development and depletion strategies" in order to achieve "maximum sustained capacity to 10.7 million barrels per day." If he is right, Saudi's swing producing days are over.
Furthermore, Saudi oil decline suggests an underlying motivation behind the continuing US project in Iraq. The new Iraqi oil law (discussed in my previous diary, updated HERE by blogger Raed Jarrar with the "final, official" version) could allow the US occupation to appoint itself a sort of OPEC on the Tigris through the new Iraqi Federal Oil and Gas Council established in the law, replacing Saudi as the world's swing producer. That is, when or if conditions in Iraq ever allow development of the resource to full production potential of six million barrels per day or more (from barely two million barrels per day today), Washington itself would acquire power it has until now always cooperated with the Saudi royals in order to exert.
The notion of American "success" in Iraq that officials so often bandy about in reality means that there will be permanent military enforcement of the swing production role that Bush-connected Washington elites desire. It should be emphasized that it is not that oil itself that is at issue, but the hand on the tap. Noam Chomsky has it right, as outlined by Daily Kos diarist indefinitelee last week, "if the United States controls Middle East resources it'll have veto power over its industrial rivals."
Control of oil is the linchpin behind the unspoken US strategy in the Middle East. Ability to control swing production through its Iraqi client, backed by the US military in order to make the oil law stick, is a major long-term goal of this endless occupation.