Fatih Birol, chief economist at the International Energy Agency, says the globe will see oil production peak in 2020 - about a decade earlier than most official government predictions.In an interview on Monday with the UK newspaper, The Independent, Birol said the world's 800 largest oil fields are seeing a 6.7 percent annual decline in production, worse than the 3.7 percent decline the agency estimated in 2007.
While a peak in production doesn't imply the oil will run out at that time, it does indicate that increasing demand won't be able to be met by increased production, which in turn could lead to a drastic spike in the price of oil.
Birol added that this could stall or even reverse any upturn for the global economy.
''One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Birol told the newspaper.
He added: "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. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future," he further noted.
In its most recent forecast, issued last month, the IEA said global oil demand will rebound 1.7 percent next year, led by rising consumption in emerging economies as the developed world recovers from recession.
But it still predicted that demand will shrink this year and said the need for OPEC oil would be limited.
It forecast world oil consumption next year would reach 85.2 million barrels per day (bpd), up from 83.8 million this year. The demand outlook for this year was "effectively unchanged" - down 2.9 percent, or 2.5 million bpd compared with last year.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.