Peak oil is the theorized point in time when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline. Peak oil theory is based on the observed rise, peak, fall, and depletion of aggregate production rate in oil fields over time. It is often confused with oil depletion; however, whereas depletion refers to a period of falling reserves and supply, peak oil refers to the point of maximum production. The concept of peak oil is often credited to geologist M. King Hubbert whose 1956 paper first presented a formal theory.
Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, predicted there would be negative global economy effects after a post-peak production decline and subsequent oil price increase because of the continued dependence of most modern industrial transport, agricultural, and industrial systems on the low cost and high availability of oil. Predictions vary greatly as to what exactly these negative effects would be. While the notion that petroleum production must peak at some point is not controversial, the assertion that this must coincide with a serious economic decline, or even that the decline in production will necessarily be caused by an exhaustion of available reserves, is not universally accepted.
Oil production forecasts on which predictions of peak oil are based are sometimes made within a range which includes optimistic (higher production) and pessimistic (lower production) scenarios. According to the International Energy Agency, conventional crude oil production peaked in 2006. A 2013 study concluded that peak oil "appears probable before 2030", and that there was a "significant risk" that it would occur before 2020, and assumed that major investments in alternatives will occur before a crisis, without requiring major changes in the lifestyle of heavily oil-consuming nations. Pessimistic predictions of future oil production made after 2007 state either that the peak has already occurred, that oil production is on the cusp of the peak, or that it will occur soon. These pessimistic predictions have proven false as world oil production has risen and hit a new high in 2018. Hubbert's original prediction that US peak oil would occur in about 1970 appeared accurate for a time, as US average annual production peaked in 1970 at 9.6 million barrels per day and mostly declined for more than 3 decades after. However, the use of hydraulic fracturing caused US production to rebound during the 2000s, challenging the inevitability of post-peak decline for the US oil production. In addition, Hubbert's original predictions for world peak oil production proved premature. Nevertheless, the rate of discovery of new petroleum deposits peaked worldwide during the 1960s and has never approached these levels since.