Saudi Aramco's core area in Dhahran city

The world's insatiable demand for petroleum is about to cause more drilling and pumping in Saudi Arabia, as the country is set to begin setting up shop on the Khurais oil field. A ten-billion dollar investment will be made which is expected to allow the nation to pump one and a half billion additional barrels of oil per day by the end of next year. The project, which is already expected to begin shipping over a million barrels of oil beginning next June, is a massive undertaking.

Saudi Arabia has, to this point, resisted producing additional oil, as it believes there is no shortage at all. Instead, the country points to the low value of the U.S. dollar and unrealistic speculators are the major driving forces behind the record-high oil prices. Still, the country remains extremely important to major oil-consuming nations such as the United States as it currently produces eleven-percent of the world's daily supply of oil and is the only country left with relatively easy-to-tap oil reserves.

[Source: AP via The Detroit News]

A doctoral dissertation by Fredrik Robelius of the Uppsala University in Sweden contends that global oil production will reach its peak yield as early as next year before falling into decline. The thesis, which attempts to estimate the largest oil fields' future production, is based on Robelius's investigation of historical oil production, new oil field discovery and global reserves. The world's largest, or giant, oil fields number less than one percent of all fields but account for over 60 percent of global production.

Analysis: Robelius verified that the decline in reserves of a field is constant at an annual rate of diminution of around six to sixteen percent. His best case scenario - peak oil in 2018. If declining oil reserves push up fuel prices and rising prices drive purchases of fuel efficient vehicles, the day of the hybrids may be just around the corner.

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• USDA: Biofuel use in U.S. will see spike in next few years, then drop

[Source: PhysOrg.com]