Oil Price Rise – Timing Benchmarks Delineate Our Likely Advance to the Oil Peak

Back in 2001, I set out some timing benchmarks for energy developments that I saw coming towards us (


Some 12 out of the top 30 non-OPEC countries have already recorded their peak production of oil. They comprise together some 42% of total non-OPEC output today. China, with approximately 9% of the volume of the 30, appears to be on a three or four-year plateau of output and could be expected to start down in 2008 or 2009. Whenever that date falls, that would be the signal that the majority of barrels lifted in the non-OPEC world were in a declining production mode. Our previous best guess of a top in 2010 might have worked if Angola and Ecuador had stayed in the non-OPEC group. But, they switched over to the OPEC production column in 2007. With their volumes subtracted from the non-OPEC total, and Chinese production rolling over as discussed above, I believe that 2008 would be the most likely date for the remaining non-OPEC group to reach their combined peak.

The main significance of this particular benchmark is that after 2008, the non-OPEC world would be unable, on balance, to produce a net incremental barrel to supply its own needs, and would have to go to the OPEC countries and ask them if they had any availability of oil, and at what price it might be purchased. This situation should lift OPEC