The Effects of Peak Oil: Panic from the Oil Crunch

The reality of peak oil will set in over the next few years. But once the world realizes the serious effects it’ll have, the real panic will start.

The first sentence from the IEA’s latest oil market report is sobering:

“Despite four years of high oil prices, this report sees increasing market tightness beyond 2010, with OPEC spare capacity declining to minimal levels by 2012.”


Our world is digging itself into a serious hole. Consumption levels are growing faster than anticipated. Production levels are rapidly declining. Oil reached record prices over $78 a barrel during the summer of 2006.

But we had a good excuse for that, right?

Everything was still in disarray from the catastrophic effects of Katrina and Rita. The market became extremely tight. So we accepted the higher energy prices. Things would get better after we repaired the damage, wouldn’t they?

Almost year after those record prices, oil is marching back up. Today, prices pushed over $73.50 a barrel. No major hurricanes or disruptions to blame anymore . . . not yet, at least.

Energy and Capital