[ANALYSIS] Are we running out of oil?

Developments in the oil market in recent years have helped build up a rather pessimistic and widespread perception about the future of oil and the oil industry, which is focused on one common question: Are we running out of oil? The short answer is, “No!” That is the good news.

The bad news is that each additional barrel of high-quality oil to global supply is getting more costly and difficult to find, develop, extract and bring to wherever it is demanded.


If we are not running out of oil, what else should be blamed? Two words: peak oil. The term “peak oil” has begun to enter the common vocabulary thanks to the ongoing, quite heated, debate inside and outside of the oil industry since the turn of the new century. There is no doubt that the debate will continue in the coming years and will probably become part of long-term energy and economic planning.

Our oil-thirsty world is now demanding 86 million barrels of oil every day — or 1,000 barrels a second. This thirst is expected to increase by about 35 percent by 2030, according to the IEA, EIA and OPEC. To meet that demand will require a net additional supply of more than 1 million barrels per day each year up to 2030. This will certainly not be an easy task when we consider the following challenges facing the oil industry today and in the future:

The inventory of good prospects is diminishing even though some parts of the world have not been thoroughly explored. Since 1986, more conventional oil was produced than were replaced by new discoveries and the peak of discoveries took place in the mid-1960s. The sizes of the newly discovered oilfields are getting smaller and smaller and recent discoveries are replacing only about a quarter of global annual oil production.

Today’s Zaman