If we assume that current daily production of 82 million bbls/day (31 billion bbls in 2005) increases at 2.5% per annum and the current global oil reserves of 1200 billion bbls is not replaced by any additional oil, then oil will be exhausted by 2031. However, this is a gross simplification because:

• Oil reserves have increase over the last decades. Although overall reserves may start to decline, it will most likely be a slower process than a 25 year time frame.
• If oil was close to being exhausted, prices would sky-rocket and demand would drop back - this happened in the last two oil crises - of 1973 and 1981 (see production chart).
• Since prices have risen from $20 to $65/bbl - demand has started to slow in both China and the USA - and this could continue as the global economy slows down - hence to assume a growth of 2.5% per annum might be on the high side - demand would normally drop if prices become prohibitive.
• Alternative energy sources are being developed that become economic at $65/bbl - these include bio-diesel made from rapeseed or sugar cane, nuclear, gas-to-liquids, clean coal and expansion of existing global LNG and gas businesses. 

However, it is also possible the amount of oil reserves is overstated, particularly in the Middle East - this is quite uncertain because many of the countries with the biggest oil reserves do not allow external auditors to verify reserves numbers. Banks are not required to audit these reserves because the countries have self funding state run oil companies - they do not need to justify investments to external funding entities. It is thought by some that reserves might have been increased over the years to allow for higher OPEC quotas when these were more important in the 1990s, though this is speculative - it might also be the case that with the latest oil technologies (water injection, missible gas injection, 4D seismic, multi-lateral wells) - reserves could be understated.

One thing is well known - the easy oil has been extracted and boosting oil production will require massive capital investment. Even the wealthy oil producing nations will be reluctant to invest such sums - most likely prefering instead to expand their social welfare systems and reduce unemployment. Whether oil production growth can keep up with demand growth from the Far East is a key question - in the next decade - China and India's growth in oil demand will likely lead to political and economic tensions - as these tow new large oil importing nations compete globally for depleting oil reserves and production capacity.

The days of $20/bbl are almost certainly behind us - expect a base level of $40/bbl - with potential for prices to rise above $100/bbl if tensions increase or supply is significantly disrupted.

	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
Oil demand per year MMM bbls	31	31.8	32.6	33.4	34.2	35.1	36.0	36.8	37.8	38.7	39.7	40.7	41.7	42.7	43.8
Cum oil production MMM bbls	31	63	95	129	163	198	234	271	309	347	387	428	469	512	556
	2020	2021	2022	2023	2024	2025	2026	2027	2028	2029	2030	2031	2032	2033
Oil demand per year MMM bbls	44.9	46.0	47.2	48.3	49.6	50.8	52.1	53.4	54.7	56.1	57.5	58.9	60.4	61.9
Cum oil production MMM bbls	601	647	694	742	792	843	895	948	1003	1059	1116	1175	1236	1298
Growth	2.5%	per annum
Reserves	1200	Billion bbls