by Val Germann
A series of recent articles on THE OIL DRUM website have strongly suggested that the long-awaited and oft-denied “World Oil Peak” may have actually arrived, just a bit sooner than expected. Take a look at the graph below, shown on the TOD site and based on EIA data.
Note that actual “oil” in the 1950’s sense makes up only about 75 million barrels of the 85 million barrel-per-day world production. And part of that is “condensate” which is in fact not “oil” either. No matter, you can clearly see what looks for all the world like a peak, one forming in spite of very high prices and what should be strong demand, factors that should be bringing new supply out of the woodwork, if it existed. But that supply may not exist, after all.
Why might this be happening? There are several reasons, including the current troubles in the Middle East and the sharp declines being registered in both the North Sea and Mexican oil fields. Most important of all though could be the ongoing stagnation of Saudi production, continuing to decline slightly in spite of massive effort and investment in the kingdom’s oil infrastructure.
Could we be at the peak? It is possible, especially if a widening of the Mid-East conflict takes place, as seems likely. All bets would be off then, for certain.