The Peak Oil Theory

Posted by Oilism.com on December 20th, 2007 at 05:30pm

Peak oil theory or normally known as Hubbert Peak theory states that the future word production of oil with increasing in near years and again decline at the same rate until the reserves are exhausted. This Peak Oil theory suggest the way to find out the current reserves capacity and its duration to exhaust but it has also been disregarded as mere assumption because earlier theory on similar subjects could not state the real peak time and failed without any calculations. The theory tells that when crude oil reserves starts using the similar amount of water used to extract oil then that reserve starts exhausting and fails in near future.

This theory has been successful to determine the US oil peak time which led to a decline in oil production in United States in 1971. Since then, OPEC has been determining the oil prices in international market which had led to a major oil crisis in 1973.  After the US reserves reached its peak many other countries to follow the trend including UK’s north seas which peaked in 1990, Mexico’s national oil company and China’s two major oil reserves are on decline. This has created a sudden decrease in international oil supply. But this has not created a huge panic situation because the recent finding of oil reserves in India and other countries has balanced the demand and supply of oil in markets.

It is actually very difficult to determine the time for peak of any crude oil reserve due to the unreliable accounting of oil producing countries oil reserves and uncertain production data. Some economist have said the years 1989,1995 and 1995 -2000 to be the major years of oil peak but those failed to prove because of unavailable data. Now some economist have a speculation that 2007 might be the peak year of oil and some years later for natural gas but this cannot be proven unless the reserves exhaust completely.

Whatever be the speculation of peak oil theory, the general idea is that crude oil is reducing in quantity, all around the world and unless an alternative solution is not found, the future of world remains slightly uncertain over oil prices.

Under OPEC+ Oil+ Oil Theory+ Oil politics+ Production levels+ peak oil