Is the world running out of oil?

Fossil fuels in the form of crude oil, natural gas, and coal provide the vast majority of the world's energy resources. Since the reserves of these fuels were created millions of year ago and over the course of millions of years, they cannot be replaced in our time. Therefore, there is only a finite amount, and by definition they are being continuously depleted. In the 1950s, a distinguished scientist named Marion King Hubbert, who was working for Shell Oil's Exploration and Production Research Division at the time, published the first prediction as to when US oil production would peak. Since then, the concept of oil as a non-renewable and depleting resource has been a key aspect of the oil industry. The Arab oil embargoes of the 1970s brought the issue of finite reserves to the public forefront, and, since then, US consumers have feared there won't be enough energy to meet demand.

However, the oil industry has been driven by technology since the first oil well was drilled in Azerbaijan in 1849, and technology has allowed more oil and gas to be economically developed than once thought possible. Steam injection, seismic exploration, deepwater drilling, horizontal drilling, four-dimensional reservoir mapping, and hydraulic fracturing are just some of the technology advances that have been developed over the years. Figure 1 from the EIA's 2024 Short-term Energy Outlook shows how oil demand and supply remain tightly aligned based on market economics.

The IEA (International Energy Agency) predicts a similar increase in global demand for oil that will peak in 2030 at 106 million barrels per day as improvements in energy efficiency and adoption of renewable sources of energy will offset the effects of an increasing world population. In contrast, total global supply capacity is forecast to rise to nearly 114 million barrels a day by 2030 or 8 million barrels per day above demand. While market forces will continue to keep supply and demand in equilibrium and prevent such an oversupply, the key message is that there is sufficient global supply for the world to achieve peak oil.

Figure 2 shows a summary from WorldAtlas of the countries with the largest oil reserves in 2024 based on OPEC data plus factoring in Canada's oil sands resources. The total supply is approximately 1.5 trillion barrels. At the expected maximum demand of 106 million barrels per day, this equates to approximately a 38 year supply. Of course, production will naturally decline as fields age, but demand is expected to decline as well. One could reasonably assume that the world could continue for several decades before it would run out of oil.

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