If the growing demand from Asia and in the oil producing countries themselves continues, it is likely to consume much of the reserve production capacity over the next few years 

Thereafter, world production will start declining.

According to the report, the world's ability to keep increasing its oil production will come to an end this year.

Recent drops in demand for oil in 2008 and early 2009 perhaps rule out the possibility of high oil prices in the next year or so.

Current global oil production is about 85 million b/d. There is also said to be another 6 or so million b/d of unused productive capacity that could start producing oil in a few months.

World oil production could increase to 91-92 million b/d if demand increases.

Current demand from the U.S. and the other OECD nations appears to be gradually declining. However, in countries like China, India, Brazil and South Africa, demand for oil grew rapidly in 2009 and there is every indication it continues to increase in 2010 and beyond.

If the growing demand from Asia and in the oil producing countries themselves continues, it is likely to consume much of the reserve production capacity over the next few years.

Geopolitical disruptions of oil supplies could trigger off price spikes at any time. The International Energy Agency, in its 2009 World Energy Outlook report, estimated global oil demand, currently running at just over 85 million barrels a day, could reach 105 million barrels a day by 2030.

At the recent World Economic Forum in Davos, Thierry Desmarest, chief executive of the French oil company Total, said that the world could struggle to produce more than 95m barrels of oil a day in the future - 10 percent above present levels, but the problem of peak oil will remain.

According to Khalid Al Falih, chief executive of Saudi Aramco, "the concern about peak oil is behind us."

Tony Hayward, the BP chief executive, in an interview with the Guardian in early February, downplayed fears about dwindling supplies.

It is difficult to say whether this “peak oil” is a crisis in the making or a ploy of Western corporate to keep oil prices down, he said. In any case, the oil crisis, either of crunch or of increase in prices, will hit hard most of the non-oil producing developing countries.

The global meltdown has already adversely affected these countries and oil crunch will further worsen their economic plight.



*Published in Jordan's THE JORDAN TIMES on Mar. 3, 2010. The writer is president of the Orient Centre for Studies and Cultural Dialogue.