Once again, it is Saudi Arabia that has taken the lead. ‘Our oil policy is clear and is characterised by honesty and transparency,’ Saudi monarch King Abdullah said in late November. ‘It is based on our firm belief that we are part of the world we live in and share our world’s fortunes as well as misfortunes. Our policy is based on two main objectives: the first is to realise a fair and reasonable price for oil; and the second is to provide adequate oil supplies to all consumers. We seek dialogue rather than argument and co-operation rather than confrontation.’

King Abdullah was speaking in Riyadh at the launch of the joint oil data initiative (JODI) – a database providing energy information for more than 90 consumers and producer nations. His timing could not have been better. Even with the hurricane season close to an end, oil prices were continuing to ride well above $50 a barrel and firming up on the approach of the northern hemisphere winter. On the other side of the Atlantic, an element of panic had crept into the consumer end of the market, as policymakers and industry analysts realised late in the game that high oil prices might be here to stay.

‘The supply outlook is very bleak for 2006 and 2007 – in these two years non-OPEC supply will probably increase by little more than 300,000 barrels a day (b/d), and there are no other major increases on the immediate horizon,’ Ed Morse, executive adviser to Hess Energy Trading Company, told delegates at a seminar on energy security held by the Washington Institute on 29 November. ‘OPEC claims to be opening up, but the facts show otherwise. Iran is showing a major decline in production and there appears to be nothing new on the horizon in Saudi Arabia or Nigeria.’

Morse and other US analysts have been echoing concerns first sounded, to great media attention, by investment banker Matt Simmons in his book Twilight in the Desert, published in early 2005. ‘From the 1960s through early 1982, the main oil producing and exporting countries that formed OPEC furnished detailed field-by-field oil production data on an annual or even a semi-annual basis. This practise came to a halt in 1982 during the tenure of [then Saudi Oil Minister] Zaki Yamani This discontinuation put an end to any semblance of data transparency,’ Simmons argues. The lack of credible information and an authoritative source to carry out reality checks had led to an over-reliance on third-party sources, which in turn resulted in intense market speculation.

Figures being bandied around in the past few years on Saudi Arabia’s crude oil reserves illustrate some of this rampant speculation. In early October, Saudi Arabian Petroleum & Mineral Resources Minister Ali Naimi announced at a leading energy congress that the kingdom would be able to boost proven oil reserves by 200,000 million barrels. A few months ago, at yet another industry conference, he spoke of possible and probable reserves of an additional 100,000 million barrels.

Despite the numerous accusations hurled at OPEC, and at Middle East producers in particular, there is a growing appreciation that producers and consumers alike are in the same boat. ‘My research on Saudi Arabia’s giant and super giant fields has given me an appreciation of how fuzzy the whole topic of reserve analysis has become,’ admits Simmons. ‘Estimating the remaining productive life of oil fields is as challenging as it is to predict how long an ageing person will stay produc