Age of Oil About To End
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SHEIKH YAMANI PREDICTS PRICE CRASH AS AGE OF OIL ENDS
By Mary Fagan, Deputy City Editor
Sunday 25 June 2000
SHEIKH YAMANI, the former Saudi oil minister, has told The Telegraph that he
expects a cataclysmic crash in the price of oil in the next five years.
In an unprecedented personal interview, Sheikh Yamani also predicts that,
within a few decades, vast reserves of oil will lie unwanted and the "oil
age" will come to an end.
In an interview with Gyles Brandreth, he says: "Thirty years from now there
will be a huge amount of oil - and no buyers. Oil will be left in the
ground. The Stone Age came to an end, not because we had a lack of stones,
and the oil age will come to an end not because we have a lack of oil."
Sheikh Yamani, who was Saudi Arabia's oil minister from 1962 to 1986 and is
now in charge of an energy consultancy, became the public face of the
revolutionary oil policy that altered the balance of world power in the
He predicts that a combination of recent oil discoveries, the advance of new
technology, and heavy investment in exploration and production will all lead
to a collapse in the price of crude. He says: "I have no illusion - I am
positive there will be some time in the future a crash in the price of oil.
I can tell you with a degree of confidence that after five years there will
be a sharp drop in the price of oil."
Fuel-cell motor technology - which can produce electricity by combining
hydrogen from a variety of fuels with oxygen from the air - will have a
dramatic impact on the oil market, he predicts. "This is coming before the
end of the decade and will cut gasoline consumption by almost 100 per cent.
Imagine a country like the United States, the largest consuming nation,
where more than 50 per cent of their consumption is gasoline. If you
eliminate that, what will happen?" Saudi Arabia, he says, "will have serious
His remarks follow last week's agreement by the Organisation of Petroleum
Exporting Countries - in which Saudi Arabia is the dominant force - to a
marginal rise in production of 708,000 barrels a day in response to mounting
concern in the US and other major consuming countries over the high price of
oil. Prices per barrel have been hovering at around $30, compared with $10
at the beginning of last year. But industry experts have given warning that
Opec's latest production increase will not be enough to ease the price.
In the interview, Sheikh Yamani forecasts that prices will stay high
temporarily because of demand in the US and parts of Asia. But he argues
that this price obscures the likely long-term effect of "huge" recent
discoveries in regions such as the Caspian Sea, Yemen, Egypt and Africa. He
also predicts that Iraq, which is capable of producing 6.5 million barrels a
day, will become a bigger supplier before long.
He says: "On the supply side it is easy to find oil and produce it, and on
the demand side there are so many new technologies, especially when it comes
to automobiles." Yamani believes that automobile engine technologies
including fuel cells - which can produce electricity by combining hydrogen
from a variety of fuels with oxygen from the air - will drastically reduce
oil consumption and that, in the longer term, no one will need oil.
His views reflect those of many in the industry, although few would go so
far as to predict an end to the use of oil. Vincent Cable, a former chief
economist at Shell and now industry spokesman for the Liberal Democrats,
said: "People in the industry would not be surprised by a vision of the
future with relatively weak prices, but punctuated by occasional price
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