There is no doubt that global oil production - at about 87 million barrels a day - is sputtering. The real question is: why?

Is it, as advocates of the “peak oil theory” claim, because there is simply not enough oil left in the ground? Or is it because of other reasons, such as a lack of investment in new fields and production?

It is a fact that some of the world's biggest oil areas are being depleted rapidly.

There are plenty of examples. The world's largest oilfield at Ghawar in Saudi Arabia, which produces more than five million barrels a day, more than 6percent of global production, is thought to be in decline. But other areas, such as the Santos Basin off Brazil, are just opening up.

There are still vast amounts of oil left and the high price is making it economic to develop reserves previously considered too expensive - think the Arctic or Canada's oil sands.

Many big oil producer countries, including Venezuela, Russia and Iran, are stagnating because they are not investing enough.

The International Energy Agency believes that massive investment will be required, especially in the Middle East, to meet soaring global demand.

It claims that “conventional” oil will provide at most about 92 million barrels a day. But tens of millions more barrels a day could come from “unconventional” sources, such as oil sands, shale oil and Arctic oil, as well as liquid fuels.

Optimists forecast a peak in production in the 2020s or 2030s, but gloomier assessments indicate a peak now or in the next few years. Ultimately, we are unlikely to stop using oil simply because we run out.

A more likely scenario is that the rising price will hurt demand and force much greater energy efficiency.

Other sources, such as biofuels, will become more attractive. Either way, we are set for a period of intense change as the world seeks to adjust.

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