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While some people predict an impending energy crisis, the truth is that the supply of oil will not simply run out in the foreseeable future. Production of oil seems to follow a bell curve whether one looks at an individual oil field, a certain country’s supply, or the Earth’s oil resources. The worldwide production of oil has been steadily increasing since about 1940. That is all set to change in the near future and this is what will cause the price of oil to explode.

In 2005, oil production peaked and at this point, about 50 percent of the oil supply had been depleted. Since this time, oil production decreased and the cost of oil began to increase. Starting in the year 2020, oil production is set to make a massive drop from 60 million barrels per day to approximately 15 million barrels per day by 2040. Oil production in the midpoint year, 2030, will be equivalent to what it was in the year 1980.

Though these figures are drastic enough when considered in isolation, we need to also take into account that the population of the planet will be almost twice what it was in 1980. Not to mention that our planet is now much more industrialized, and thus oil-dependent, than it was at that time. Therefore, the gap between supply and demand becomes even more significant.

This equates to oil prices skyrocketing and countries fighting for limited oil resources. Economies most dependent on oil will take significant hits. It will not even take a complete depletion of oil reserves to cause disastrous results. Just a ten to fifteen percent shortage in supply can cause an oil-dependent economy to collapse.

Using history as an example, we can predict that even small production decreases can greatly affect the price of oil. In the 1970s, a five percent production shortfall resulted in the oil price almost quadrupling. This oil price shock was only temporary but the upcoming one is anticipated to be permanent.