IEA oil crunch warning: governments should have worked on it 10 years ago

This is a short summary of the essential statements.

The International Energy Agency’s chief economist Fatih Birol

“When we look at the oil markets the news is not very bright.

We think that the crude oil production has already peaked in 2006″


ABC TV:  “Hang on. Did you get that? Crude oil production for the world peaked in 2006”

That’s different from earlier IEA estimates. How did they get it so wrong?


Prof. Aleklett explains: Flow rates assumed by the IEA are too high, in some regions 2 times higher than achieved in the past. This is Prof. Aleklett’s projection:

How do you define an oil crunch?

“The oil crunch is when global supply fails to meet demand and starts to drop and arguably we fear starts to drop so fast that you almost call it a collapse”


Chris Skrebowski, former editor of Petroleum Review

“All the calculations tell us that’s going to be no later than 2014 (OPEC using all the spare capacity it is sitting on and all that spare capacity is working) and it could be as early as 2013. It could be even earlier”

Demand surge in China….

Demand surge in India….

“…if that [surge in demand from China and India] continues

then it brings the crisis right forward…”

IEA’s Birol: “The time is running out, the oil is today our lifeline, it is everywhere in the economy, if the prices go up or if there’s a supply disruption this will be definitely very bad news”

ABC TV: “How urgent is this?”

Birol: “I think it would have been better if the governments had started to work on it at least 10 years ago”