Oil Leaks

The most recent Wikileaks cable released by the Guardian has revealed that US diplomats are convinced that Saudi Arabia has overestimated its vaunted oil reserves by a stunning 40%. The warning from a senior Saudi government oil executive said that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels.

Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then -possibly as early as 2012 - global oil production would have hit its highest point.

Saudi Arabia is the world's largest oil supplier, and is widely believed to be sitting atop the largest supply of the stuff in the world. But this latest revelation shows that the country may not have enough oil to keep prices from rising drastically over the next couple years.

Hitting peak oil as soon as next year would have a momentous impact on the global economy, which is still extremely dependent on oil. Oil prices are already creeping above the $100 a barrel mark. Analysts have counted on the Middle Eastern nation to pump additional oil if the prices rise high enough, and threaten to choke off demand.

But perhaps the time when Saudi Arabia can stabilize oil demand is well past. As to how equipped the world is, we know. Very poorly. There are no alternatives to take on the role of oil. Will it mean a grinding to halt of the world economy? Do we still have time to start saving up by reducing consumption? But, who will start?