Update: I’ll leave the blog below in tact, but really I should point out that the reason the oil price hasn’t moved is that the person quoted in the Wikileaked cable, Sadad al Husseini, is a well-known peak oil theorist who has said this in public many times before.

This morning’s story in the Guardian that US diplomats believed Saudi Arabia to have overstated their oil reserves should ring alarm bells around the energy world.

Every time there is a debate about whether Opec should raise production to lower oil prices, many commentators argue it is irrelevant: that the Middle East doesn’t have as much oil as it says and that it can’t raise production enough to bring prices down.

If this is true, it has serious consequences for the oil price. If Opec doesn’t have the slack to up production and bring prices down, they will have a lot further to go above the $100 barrier.