Aprediction of future world petroleum production levels and pricing is only partially dependent on the size of reserves, as political factors will play just as important a role. A key shift in the dynamics of production and pricing has seen Russia move from an open and rapidly increasing producer to a largely statecontrolled industry struggling to maintain the current production level.

A number of trends clearly demonstrate that the current situation of comparatively low world oil prices is a temporary phenomenon. The USA in particular faces significant challenges in adjusting to the next coming price rise. Specific steps will need to be taken given the current concerns about the economy, national security, and greenhouse gasses.

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In the long term (i.e. following the current disruption) a moderate rise in production by the Organization of the Petroleum Exporting Countries will be offset by a decrease in production in the rest of the world, with the former Soviet Union countries’ production remaining steady. The production from ultra deep-water fields will allow “peak oil” to instead be “plateau” in the coming decade, followed by a sharp fall. The supply side crisis of 2005-2008 was due to the peak reached in the rest of the world in 2003, combined with a cessation of significant production growth in Russia after 2004 during a period of rapid demand increase. The world was nearing peak oil, which resulted in high prices and associated political and economic disruptions.

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