Understanding Oil Depletion

• Proven oil reserves represent quantities that geological and engineering data demonstrate with reasonable certainty to be recoverable under existing economic and technical conditions, but exclude potential resources that may become accessible with future technology or higher prices.
• Peak oil theory suggests that global oil production will eventually reach a maximum rate and then decline, though the timing remains debated due to technological advances, unconventional oil resources, and changing demand patterns.
• The transition to renewable energy and electric transportation is accelerating in many regions, potentially reducing oil demand before physical depletion occurs, fundamentally changing the relevance of reserve-to-production ratios.
• Geopolitical factors, climate policies, and economic considerations increasingly influence oil production and consumption decisions independently of physical availability, making simple depletion calculations less predictive of actual outcomes.