Very simply, Peak Oil describes the point in time when oil production in an area—an oil field, a state, a nation, or the world—reaches maximum production.
Graphically represented, after reaching the top of a roughly bell-shaped curve, oil production may flatten out for a few years but then it will inevitably decline.
Historical proof of Peak Oil is demonstrated by the work of M. King Hubbert, who, in 1956, correctly predicted that US oil production would peak between 1965 and 1970.
A growing number of very credible industry participants and analysts believe that we are now at or near the top of the curve of global oil production.
With a rising world population, and large developing countries like China and India experiencing rapid growth, between 2005 and July of 2008 demand was gradually outstripping supply. During the second half of 2008, high oil prices plus financial turmoil and the economic slump actually reduced demand for oil, thus prices crashed. But the reprieve will only be temporary because more oil is being consumed than found; despite the latest technology, few major oil fields have been discovered since the mid-1970s.
The most valuable and widely used source of energy on earth is gradually become harder to find and more expensive, setting the scene for considerable social and economic change worldwide.