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That is quite a change from four years ago. After the attacks on New York and Washington of Sept. 11, 2001, Saudi Arabia's position as the supplier of choice was threatened. Fifteen of the 19 hijackers were Saudi nationals, and the man who inspired the attacks, Osama bin Laden, was born in Saudi Arabia; and Saudi funds had financed Taliban schools in Afghanistan. To make matters worse, Saudi intelligence agencies dragged their feet in sharing information with their American counterparts. Then came the Iraq war. Among the fringe benefits of removing Saddam Hussein from power, went the thinking in the United States at the time, would be a rapid recovery of that country's oil production. In some hawkish circles in Washington, it was thought that a free Iraq would eventually undercut OPEC's power and marginalize Saudi Arabia.
The day American troops entered Baghdad, Mr. Cheney told the American Society of Newspaper Editors that Iraq would be able to produce as much as three million barrels a day, "hopefully, by the end of the year." Still more optimistic forecasts predicted that Iraqi production would climb to six million barrels a day within five years, and provided more fodder to the theory that American troops went into Iraq to break OPEC's back, weaken the Saud dynasty and reduce the kingdom's oil-based influence.
Of course, these predictions turned out to be wrong. Iraq's production is struggling at two million barrels a day because of the relentless targeting of pipelines and infrastructure by the insurgency. Exports lag prewar levels and today few, even among Washington's most radical neoconservatives, expect that a restoration of Iraq's oil sector will quickly chip away at Saudi Arabia's clout. The kingdom remains unrivaled. Iran's production comes in a distant second, but that country, which just elected a conservative president, is at odds with the international community over its decision to develop a civilian nuclear program. That leaves Libya, a country at the center of attention from American diplomats and oil executives last year, but its reserves are less than a sixth those of Saudi Arabia. "All the countries we thought we could diversify our production away from Saudi Arabia haven't lived up to our expectations," said Amy Myers Jaffe, the associate director of Rice University's energy program in Houston. "We are definitely more dependent on the Saudis, absolutely, than we were before 9/11."
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According to United States government estimates, the world will need Saudi Arabia to produce some 18 million barrels a day by 2020 and 22.5 million by 2025. But Saudi officials - and many Western analysts - consider these forecasts unrealistic. Questions still surround Saudi Arabia, fanning doubt over the country's ability to meet the world's growing demand for oil. These revolve around the true extent of its huge oil reserves, the rate at which its fields are depleting, and the output at Ghawar, the world's largest oil field, which accounts for half the nation's output. Matthew Simmons, a Houston-based investment banker, has recently made popular the notion - held by a tiny minority - that Saudi Arabia is fudging the rate at which its fields are depleted and, in speeches and in a recently published book, contends the country has reached a peak in production. While few oil analysts agree with Mr. Simmons, some remain skeptical of Saudi Aramco's ability to increase capacity as planned.
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http://www.nytimes.com/2005/08/06/business/worldbusiness/06saudi.html?ei=5070&en=3255ae548af4243b&ex=1123992000&emc=eta1&pagewanted=print