Peak Oil by 2020 warns IEA

The world will hit peak oil within the next decade, a leading energy analyst claimed this week.

Fatih Birol, chief economist at the International Energy Agency, said the majority of global oil reserves will likely be used up by 2020.

In an interview with the Independent, Birol said an IEA survey of 800 oil fields found that most of the biggest fields have already peaked.

Oil production in these fields is declining at 6.7% per year, nearly twice the 3.7% decline the IEA predicted in 2007.

Current oil consumption levels are “patently unsustainable”, Birol said, and leave countries without access to oil reserves in a vulnerable position.

As oil reserves dry out, oil prices will spike, potentially negating any upturn in the global economy.

“Many people think there will be a recovery in a few years’ time but it will be a slow recovery and a fragile recovery and we will have the risk that the recovery will be strangled with higher oil prices,” Birol said.

He added that governments must start preparing now for a world without oil.

“One day we will run out of oil,” he told the Independent..

“We have to leave oil before oil leaves us, and we have to prepare ourselves for that day.

“The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously.”

“The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly,” he said.

“They already have about 40 per cent share of the oil market and this will increase much more strongly in the future.”