he largest oil terminal in the world, Ras Tanura, is on the eastern coast of Saudi Arabia. From Ras Tanura's control tower, you can see the totems of oil's dominion - supertankers coming and going, row upon row of storage tanks, and miles of pipes. I visited Ras Tanura because oil is no longer out of mind, thanks to record prices caused by refinery shortages and surging demand - most notably in the US and China - which has strained the capacity of producers, especially Saudi Arabia, the largest exporter.
Unlike the 1973 crisis, when the embargo by the Arab members of the Organisation of Petroleum Exporting Countries (Opec) created an artificial shortfall, today's shortage, or near-shortage, is real. If demand surges even more, or if a producer goes offline because of unrest or terrorism, there may suddenly not be enough to go around.
As Aref al-Ali, my escort from Saudi Aramco, the giant state-owned oil company, pointed out: "One mistake at Ras Tanura today, and the price of oil will go up." This has turned the port into a fortress; its entrances have an array of gates and bomb barriers to prevent terrorists from cutting off the black oxygen that the modern world depends on.
Yet the problem is far greater than the brief havoc that could be wrought by a speeding zealot with 50lb of TNT in the boot of his car. The gap between demand and supply, once considerable, has steadily narrowed, and today is almost negligible. Even before Hurricane Katrina. If consumption begins to exceed production by even a small amount, the price of a barrel of oil could soar to triple-digit levels.
But will such a situation come to pass? That depends on Saudi Arabia. You need to know whether the Saudis, who possess 22 per cent of the world's oil reserves, can increase their country's output beyond its limit of 10.5 million barrels a day, and beyond the 12.5 million target it has set for 2009. (World consumption is 84 million barrels a day.)
Saudi Arabia is the sole oil superpower. No other producer has reserves close to its 263 billion barrels, which is almost twice as much as the runner-up, Iran, with 133 billion barrels. Theunexploited reserves in the Alaska National Wildlife Refuge are believed to be about 10 billion.
The truth about Saudi oil is hard to figure out. Oil is an industry in which not only is the product hidden from sight, but so is reliable information about it. For 31 years, Matthew Simmons has prospered as the head of his own firm, Simmons & Company International, which advises energy companies on mergers and acquisitions. A member of the Council on Foreign Relations, a graduate of the Harvard Business School and an unpaid adviser on energy policy to the 2000 presidential campaign of George W Bush, he would be a card-carrying member of the global oil nomenclatura, if cards were issued for such things. Yet he is one of the principal reasons the oil world is beginning to ask hard questions of itself. Two years ago, Simmons went to Saudi Arabia on a government tour for business executives. Instead of being impressed, as most visitors tend to be, with the size and expertise of the Saudi oil industry, he became perplexed.
He returned home with an itch to scratch. Like every Opec country, Saudi Arabia provides only general numbers about its output and reserves; it does not release details about how much oil is extracted from each reservoir and what methods are used to extract that oil, and it does not permit audits by outsiders.
"Peaking" is a term used in oil geology to define the point at which reservoirs can no longer produce increasing amounts of oil. (This tends to happen when reservoirs are about half-empty.) "Peak oil" is the point at which maximum production is reached; afterward, no matter how many wells are drilled in a country, production begins to decline.
Saudi Arabia and other Opec members may have enough oil to last for generations, but that is no longer the issue. The eventual and painful shift to different sources of energy - the start of the post-oil age - does not begin when the last drop of oil is sucked from under the desert. It begins when producers are unable to continue increasing their output to meet rising demand. Crunch time comes long before the last drop.
As Simmons searched for clues to the truth of the Saudi situation, he immersed himself in the minutiae of oil geology. He realised that data on Saudi fields might be found in the files of the Society of Petroleum Engineers. Before he poked around, no one had taken time to pull together the SPE papers that involved Saudi oil fields and review them. They are perhaps the best public data about the condition and the prospects of Saudi reservoirs.
Ghawar is the treasure of the Saudi treasure chest. It is the largest oil field in the world and has produced, in the past 50 years, about 55 billion barrels of oil. The field currently produces more than 5 million barrels a day, which is about half of the kingdom's output. If Ghawar is facing problems, so is Saudi Arabia - and the world.
Simmons found that the Saudis are using increasingly large amounts of water to force oil out of Ghawar. "Someday - perhaps soon - the high well flow rates at Ghawar's northern end will fade, as reservoir pressures finally plummet," Simmons says. "Then, Saudi oil output will have peaked. The death of this great king [Ghawar] leaves no field of vaguely comparable stature in the line of succession. Twilight at Ghawar is fast approaching."
Saudi officials belittle his work. Nansen Saleri, a senior Aramco official, has described him as a banker "trying to come across as a scientist". In a speech last year, Saleri wryly said: "I can read 200 papers on neurology, but you wouldn't want me to operate on your relatives."
Before leaving for Saudi Arabia, I was advised by oil experts to try to interview Sadad al-Husseini, who retired last year after serving as Aramco's top executive for exploration and production. He was eager to talk. The message he delivered was clear: the world is heading for an oil shortage. His warning is different from the calming speeches that other Saudis, along with American officials, deliver on an almost daily basis.
Husseini explained that the need to produce more oil is coming from two directions. Most obviously, demand is rising; in recent years, global demand has increased by 2 million barrels a day. (Current daily consumption, remember, is about 84 million barrels a day.)
Less obviously, oil producers deplete their reserves every time they pump out a barrel of oil. This means that merely to maintain their reserve base, they have to replace the oil they extract from declining fields. It's the geological equivalent of running to stay in place. Husseini acknowledged that new fields are coming online, like offshore west Africa and the Caspian basin, but he said that their output isn't big enough to offset this growing need.
"You look at the globe and ask: `Where are the big increments?' and there's hardly anything but Saudi Arabia," he said. "The kingdom and Ghawar field are not the problem. That misses the whole point. The problem is that you go from 79 million barrels a day in 2002 to 84.5 million in 2004. You're leaping by 2 million to 3 million a year, and if you have to cover declines, that is another 4 million to 5 million."
If demand and depletion patterns continue, every year the world will need to open enough fields or wells to pump an additional 6 million to 8 million barrels a day - at least 2 million new barrels a day to meet the rising demand and at least 4 million to compensate for the declining production of existing fields. "That's like a whole new Saudi Arabia every couple of years," Husseini said.
Experts such as Husseini are concerned about the prospect of trying to produce 15 million barrels a day. Even if production can be ramped up that high, geology may not be forgiving. Fields that are overproduced can drop off, in terms of output, sharply and suddenly, leaving behind large amounts of oil that cannot be coaxed out .
In the 1970s, President Jimmy Carter called for the moral equivalent of war to reduce dependence on foreign oil; he was not re-elected. Since then, few politicians have spoken of an energy crisis. The US energy bill signed recently by President Bush did not even raise fuel-efficiency standards for passenger cars. When a crisis comes - whether in a year or two or 10 - it will be all the more painful because we will have done little or nothing to prepare for it.
A version of this article originally appeared in 'The New York Times Magazine'