The world is heavily dependent on oil to meet its energy needs, with more of our energy coming from oil than any other source. In 2009 about 35% of the worlds primary energy was provided by burning oil, followed by coal (29%), natural gas (24%), hydro-electric (7%) and nuclear (5%) .
Despite the importance of oil as a source of energy and chemical feedstocks, it is not easy to gauge the true size of global reserves and how long they will last for. Uncertainties in the reserve estimates for oil producing countries result from a lack of standardisation in reserve reporting, the necessity of making assumptions about recoverability, inappropriate aggregation methods and possible mis-representations by national oil companies for political and economic reasons .
Figures for actual production and consumption are readily available however, and these can be plotted to reveal current trends in regional and global energy use. Three publicly available sources of this information are the BP Statistical Review of World Energy , EIA statistics  &  and OPEC Annual Statistical Bulletins  & . In the charts below, oil production and consumption are plotted by region, from 1965 to present, based on information from these sources.
As oil reserves are finite, it is inevitable that production will rise to a peak or plateau and subsequently decline . On this basis, gaussian models have been fitted to the production and consumption information, and these curves are also shown on the charts. To allow a better fit with respect to the 1970s oil shocks, two part models are used. Note that simple curve fitting like this lacks an adequate theoretical basis  and other functional forms that show an earlier or later peak could fit the available information just as well. Such curve fitting also cannot predict the outcome of political / economic events such as the 2008 financial crisis, which has already impacted global oil use. However the curves do clearly demonstrate a widening gap between global oil production and consumption.
Oil production in North America shows an initial peak in 1973. Considering the BP and EIA data, a higher peak occurred in 1985 and production has declined slowly since then. Oil consumption in North America went through an initial peak in 1978, dropped to a local minimum in 1983 and then rose steadily until 2008. At present, consumption significantly exceeds production.
In South America both production and consumption of oil have risen steadily since 1975. Production has exceeded consumption over this period, making the region a net exporter of oil.
Oil production in Europe & Eurasia rose to a peak around 1988, dropped back to a local minimum in 1993 and has risen steadily since then. Oil consumption shows an initial peak in 1973, followed by a higher peak in 1979. Consumption then dropped back to about the same level as the 1973 peak and hovered there until 1990. Following a sharp decline, consumption has since remained steady. The region currently consumes more oil than it produces, however the shortfall is decreasing.
The Middle East is the world's most important oil producing region and accounts for about 30% of the world's supply. Oil production in the region rose to a peak in 1977 and then dropped sharply to a local minimum in 1985. Since then production has again risen steadily. Consumption of oil in the Middle East shows a steady rise from 1965 to present, although remains well below production.
Oil production in Africa has risen steadily since 1965, with a small local peak between 1970 and 1980. Consumption has also risen steadily over this period, although remains comparatively low, and significantly below production.
Oil production in the Asia Pacific region appears to have reached a peak, with increases in production slowing since 1965. Consumption has risen at a much faster rate over the same period, making the region a net importer of oil and the world's largest consumer.
Summing both the historic production and consumption data, and the fitted curves for the six regions, yields a set of overall curves for the world.
A second chart shows the difference between global production and consumption. The curves show that oil consumption currently exceeds production, and this gap looks set to increase in the coming years.
Important questions to ask are:
Why does this shortfall currently exist? And...
How will the increasingly wide gap be filled?
The current situation may arise from the exclusion of some non-conventional liquids from the BP and OPEC production figures . Non-conventional liquids include extra heavy oils, oil shale, oil sands, gas-to-liquids (GTL), coal-to-liquids (CTL) and biofuels. These can be difficult and expensive to extract, involve greater (possibly severe) environmental damage and yield a relatively low energy return on investment . Conversely, conventional liquids, including crude oil, condensates and natural-gas-liquids (NGL), can be produced relatively easily and at low cost. These make up the bulk of the world's oil supply at present.
Global demands for oil that exceed the available production of conventional liquids will place upwards pressure on energy costs. In addition to allowing extraction of non-conventional liquids, higher energy costs will prompt reductions in energy use, efficiency improvements and investments in alternatives such as renewables. Hence the future make-up of global energy supplies will depend on political, environmental and economic considerations. In light of a possible shortfall in cheaply available energy, timely decisions and investment in respective technologies / infrastructure are needed to ensure the continuity of energy supplies.
August 1, 2011 - D. de San Miguel
1. "BP Statistical Review of World Energy June 2010". BP, June, 2010
2. "Total Oil Supply (Thousand Barrels Per Day) ". Energy Information Administration - Official Energy Statistics from the U.S. Government, Extracted July, 2010
3. "Total Consumption of Petroleum Products (Thousand Barrels Per Day)". Energy Information Administration - Official Energy Statistics from the U.S. Government, Extracted July, 2010
4. "Annual Statistical Bulletin 2004". Organization of the Petroleum Exporting Countries, 2005
5. "Annual Statistical Bulletin 2009". Organization of the Petroleum Exporting Countries, 2009
6. Steve Sorrell, Jamie Speirs, Roger Bentley, Adam Brandt, Richard Miller "Global Oil Depletion An assessment of the evidence for a near-term peak in global oil production". UK Energy Research Centre, August, 2009