Oil Crash

Oil Crash

Oil depletion occurs in the second half of the production curve of an oil well, oil field, or the average of total world oil production. The Hubbert peak theory makes predictions of production rates based on prior discovery rates and anticipated production rates. Hubbert curves predict that the production curves of non-renewing resources approximate a bell curve. Thus, when the peak of production is passed, production rates enter an exponential decline.

The American Petroleum Institute estimated in 1999 the world's oil supply would be depleted between 2062 and 2094, assuming total world oil reserves at between 1.4 and 2 trillion barrels (220 and 320 km3) and consumption at 80 million barrels per day (13,000,000 m3/d). In 2004, total world reserves were estimated to be 1.25 trillion barrels (199 km3) and daily consumption was about 85 million barrels (13,500,000 m3), shifting the estimated oil depletion year to 2057. A study published in the journal Energy Policy by researchers from Oxford University, however, predicted demand would surpass supply by 2015 (unless constrained by strong recession pressures caused by reduced supply or government intervention).

The United States Energy Information Administration predicted in 2006 that world consumption of oil will increase to 98.3 million barrels per day (15,630,000 m3/d) (mbd) in 2015 and 118 mbd in 2030. With 2009 world oil consumption at 84.4 mbd, reaching the projected 2015 level of consumption would represent an average annual increase between 2009 and 2015 of 2.7% per year while EIA's own figures show declining consumption and declining supplies during the 2005–2009 period.