Petroleum

Petroleum, in one form or another, has been used since ancient times. More than 4300 years ago, bitumen was mentioned when the Sumerians used it to make boats. A tablet of the legend of the birth of Sargon of Akkad mentions a basket which was closed by straw and bitumen. More than 4000 years ago, according to Herodotus and Diodorus Siculus, asphalt was used in the construction of the walls and towers of Babylon; there were oil pits near Ardericca and Babylon, and a pitch spring on Zakynthos.[10] Great quantities of it were found on the banks of the river Issus, one of the tributaries of the Euphrates. Ancient Persian tablets indicate the medicinal and lighting uses of petroleum in the upper levels of their society.

The use of petroleum in ancient China dates back to more than 2000 years ago. The I Ching, one of the earliest Chinese writings, cites that oil in its raw state, without refining, was first discovered, extracted, and used in China in the first century BCE. In addition, the Chinese were the first to record the use of petroleum as fuel as early as the fourth century BCE.[11][12][13] By 347 CE, oil was produced from bamboo-drilled wells in China.[14][15]

In the 7th century, petroleum was among the essential ingredients for Greek fire, an incendiary projectile weapon that was used by Byzantine Greeks against Arab ships, which were then attacking Constantinople.[16] Crude oil was also distilled by Persian chemists, with clear descriptions given in Arabic handbooks such as those of Abu Bakr al-Razi (Rhazes).[17] The streets of Baghdad were paved with tar, derived from petroleum that became accessible from natural fields in the region.

In the 9th century, oil fields were exploited in the area around modern Baku, Azerbaijan. These fields were described by the Arab geographer Abu Bakr al-Razi in the 10th century, and by Marco Polo in the 13th century, who described the output of those wells as hundreds of shiploads.[18] Arab and Persian chemists also distilled crude oil to produce flammable products for military purposes. Through Islamic Spain, distillation became available in Western Europe by the 12th century.[19] It has also been present in Romania since the 13th century, being recorded as păcură.[20]

Sophisticated oil pits, 4.5 to 6 metres (15 to 20 ft) deep, were dug by the Seneca people and other Iroquois in Western Pennsylvania as early as 1415–1450. The French General Louis-Joseph de Montcalm encountered Seneca using petroleum for ceremonial fires and as a healing lotion during a visit to Fort Duquesne in 1750.[21]

Early British explorers to Myanmar documented a flourishing oil extraction industry based in Yenangyaung that, in 1795, had hundreds of hand-dug wells under production.[22]

Merkwiller-Pechelbronn is said to be the first European site where petroleum has been explored and used. The still active Erdpechquelle, a spring where petroleum appears mixed with water has been used since 1498, notably for medical purposes.

There was activity in various parts of the world in the mid-19th century. A group directed by Major Alexeyev of the Bakinskii Corps of Mining Engineers hand-drilled a well in the Baku region of Bibi-Heybat in 1846.[23] There were engine-drilled wells in West Virginia in the same year as Drake's well.[24] An early commercial well was hand dug in Poland in 1853, and another in nearby Romania in 1857. At around the same time the world's first, small, oil refinery was opened at Jasło in Poland, with a larger one opened at Ploiești in Romania shortly after. Romania is the first country in the world to have had its annual crude oil output officially recorded in international statistics: 275 tonnes for 1857.[25][26]

In 1858, Georg Christian Konrad Hunäus found a significant amount of petroleum while drilling for lignite in Wietze, Germany. Wietze later provided about 80% of German consumption in the Wilhelminian Era.[27] The production stopped in 1963, but Wietze has hosted a Petroleum Museum since 1970.[28]

Oil sands have been mined since the 18th century.[29] In Wietze in lower Saxony, natural asphalt/bitumen has been explored since the 18th century.[30] Both in Pechelbronn as in Wietze, the coal industry dominated the petroleum technologies.[31]

Chemist James Young in 1847 noticed a natural petroleum seepage in the coal mine at riddings Alfreton, Derbyshire from which he distilled a light thin oil suitable for use as lamp oil, at the same time obtaining a more viscous oil suitable for lubricating machinery. In 1848, Young set up a small business refining crude oil.[32]

Young eventually succeeded, by distilling cannel coal at low heat, in creating a fluid resembling petroleum, which when treated in the same way as the seep oil gave similar products. Young found that by slow distillation he could obtain several useful liquids from it, one of which he named "paraffine oil" because at low temperatures it congealed into a substance resembling paraffin wax.[32]

The production of these oils and solid paraffin wax from coal formed the subject of his patent dated October 17, 1850. In 1850, Young & Meldrum and Edward William Binney entered into partnership under the title of E.W. Binney & Co. at Bathgate in West Lothian and E. Meldrum & Co. at Glasgow; their works at Bathgate were completed in 1851 and became the first truly commercial oil-works in the world with the first modern oil refinery.[33]

The world's first oil refinery was built in 1856 by Ignacy Łukasiewicz.[34] His achievements also included the discovery of how to distill kerosene from seep oil, the invention of the modern kerosene lamp (1853), the introduction of the first modern street lamp in Europe (1853), and the construction of the world's first modern oil "mine" (1854).[35] at Bóbrka, near Krosno (still operational as of 2020).

The demand for petroleum as a fuel for lighting in North America and around the world quickly grew.[36]

The first oil well in the Americas was drilled in 1859 by Edwin Drake at what is now called the Drake Well in Cherrytree Township, Pennsylvania.There also was a company associated with it, and it sparked a major oil drilling boom.[37]

The first commercial oil well in Canada became operational in 1858 at Oil Springs, Ontario (then Canada West).[38] Businessman James Miller Williams dug several wells between 1855 and 1858 before discovering a rich reserve of oil four metres below ground.[39] Williams extracted 1.5 million litres of crude oil by 1860, refining much of it into kerosene lamp oil. Williams's well became commercially viable a year before Drake's Pennsylvania operation and could be argued to be the first commercial oil well in North America.[40] The discovery at Oil Springs touched off an oil boom which brought hundreds of speculators and workers to the area. Advances in drilling continued into 1862 when local driller Shaw reached a depth of 62 metres using the spring-pole drilling method.[41] On January 16, 1862, after an explosion of natural gas, Canada's first oil gusher came into production, shooting into the air at a recorded rate of 480 cubic metres (3,000 bbl) per day.[42] By the end of the 19th century the Russian Empire, particularly the Branobel company in Azerbaijan, had taken the lead in production.[43]

Access to oil was and still is a major factor in several military conflicts of the 20th century, including World War II, during which oil facilities were a major strategic asset and were extensively bombed.[44] The German invasion of the Soviet Union included the goal to capture the Baku oilfields, as it would provide much-needed oil supplies for the German military which was suffering from blockades.[45]

Oil exploration in North America during the early 20th century later led to the U.S. becoming the leading producer by mid-century. As petroleum production in the U.S. peaked during the 1960s, the United States was surpassed by Saudi Arabia and the Soviet Union in total output.[46][47][48]

In 1973, Saudi Arabia and other Arab nations imposed an oil embargo against the United States, United Kingdom, Japan and other Western nations which supported Israel in the Yom Kippur War of October 1973.[49] The embargo caused an oil crisis. This was followed by the 1979 oil crisis, which was caused by a drop in oil production in the wake of the Iranian Revolution and caused oil prices to more than double.

The two oil price shocks had many short- and long-term effects on global politics and the global economy.[50] They led to sustained reductions in demand as a result of substitution to other fuels, especially coal and nuclear, and improvements in energy efficiency, facilitated by government policies.[51] High oil prices also induced investment in oil production by non-OPEC countries, including Prudhoe Bay in Alaska, the North Sea offshore fields of the United Kingdom and Norway, the Cantarell offshore field of Mexico, and oil sands in Canada.[52]

About 90 percent of vehicular fuel needs are met by oil. Petroleum also makes up 40 percent of total energy consumption in the United States, but is responsible for only one percent of electricity generation.[53] Petroleum's worth as a portable, dense energy source powering the vast majority of vehicles and as the base of many industrial chemicals makes it one of the world's most important commodities.

The top three oil-producing countries as of 2018 are the United States, Russia, and Saudi Arabia.[54] In 2018, due in part to developments in hydraulic fracturing and horizontal drilling, the United States became the world's largest producer.[55]

About 80 percent of the world's readily accessible reserves are located in the Middle East, with 62.5 percent coming from the Arab five: Saudi Arabia, United Arab Emirates, Iraq, Qatar, and Kuwait. A large portion of the world's total oil exists as unconventional sources, such as bitumen in Athabasca oil sands and extra heavy oil in the Orinoco Belt. While significant volumes of oil are extracted from oil sands, particularly in Canada, logistical and technical hurdles remain, as oil extraction requires large amounts of heat and water, making its net energy content quite low relative to conventional crude oil. Thus, Canada's oil sands are not expected to provide more than a few million barrels per day in the foreseeable future.[56][57][58]

Petroleum is a fossil fuel derived from fossilized organic materials, such as zooplankton and algae.[70][71] Vast amounts of these remains settled to sea or lake bottoms where they were covered in stagnant water (water with no dissolved oxygen) or sediments such as mud and silt faster than they could decompose aerobically. Approximately 1 m below this sediment, water oxygen concentration was low, below 0.1 mg/L, and anoxic conditions existed. Temperatures also remained constant.[71]

As further layers settled into the sea or lake bed, intense heat and pressure built up in the lower regions. This process caused the organic matter to change, first into a waxy material known as kerogen, found in various oil shales around the world, and then with more heat into liquid and gaseous hydrocarbons via a process known as catagenesis. Formation of petroleum occurs from hydrocarbon pyrolysis in a variety of mainly endothermic reactions at high temperatures or pressures, or both.[71][72] These phases are described in detail below.

In the absence of plentiful oxygen, aerobic bacteria were prevented from decaying the organic matter after it was buried under a layer of sediment or water. However, anaerobic bacteria were able to reduce sulfates and nitrates among the matter to H₂S and N₂ respectively by using the matter as a source for other reactants. Due to such anaerobic bacteria, at first, this matter began to break apart mostly via hydrolysis: polysaccharides and proteins were hydrolyzed to simple sugars and amino acids respectively. These were further anaerobically oxidized at an accelerated rate by the enzymes of the bacteria: e.g., amino acids went through oxidative deamination to imino acids, which in turn reacted further to ammonia and α-keto acids. Monosaccharides in turn ultimately decayed to CO₂ and methane. The anaerobic decay products of amino acids, monosaccharides, phenols and aldehydes combined into fulvic acids. Fats and waxes were not extensively hydrolyzed under these mild conditions.[71]

Some phenolic compounds produced from previous reactions worked as bactericides and the actinomycetales order of bacteria also produced antibiotic compounds (e.g., streptomycin). Thus the action of anaerobic bacteria ceased at about 10 m below the water or sediment. The mixture at this depth contained fulvic acids, unreacted and partially reacted fats and waxes, slightly modified lignin, resins and other hydrocarbons.[71] As more layers of organic matter settled into the sea or lake bed, intense heat and pressure built up in the lower regions.[72] As a consequence, compounds of this mixture began to combine in poorly understood ways to kerogen. Combination happened in a similar fashion as phenol and formaldehyde molecules react to urea-formaldehyde resins, but kerogen formation occurred in a more complex manner due to a bigger variety of reactants. The total process of kerogen formation from the beginning of anaerobic decay is called diagenesis, a word that means a transformation of materials by dissolution and recombination of their constituents.[71]

Kerogen formation continued to a depth of about 1 km from the Earth's surface where temperatures may reach around 50 °C. Kerogen formation represents a halfway point between organic matter and fossil fuels: kerogen can be exposed to oxygen, oxidize and thus be lost, or it could be buried deeper inside the Earth's crust and be subjected to conditions which allow it to slowly transform into fossil fuels like petroleum. The latter happened through catagenesis in which the reactions were mostly radical rearrangements of kerogen. These reactions took thousands to millions of years and no external reactants were involved. Due to the radical nature of these reactions, kerogen reacted towards two classes of products: those with low H/C ratio (anthracene or products similar to it) and those with high H/C ratio (methane or products similar to it); i.e., carbon-rich or hydrogen-rich products. Because catagenesis was closed off from external reactants, the resulting composition of the fuel mixture was dependent on the composition of the kerogen via reaction stoichiometry. Three types of kerogen exist: type I (algal), II (liptinic) and III (humic), which were formed mainly from algae, plankton and woody plants (this term includes trees, shrubs and lianas) respectively.[71]

Catagenesis was pyrolytic despite the fact that it happened at relatively low temperatures (when compared to commercial pyrolysis plants) of 60 to several hundred °C. Pyrolysis was possible because of the long reaction times involved. Heat for catagenesis came from the decomposition of radioactive materials of the crust, especially ⁴⁰K, ²³²Th, ²³⁵U and ²³⁸U. The heat varied with geothermal gradient and was typically 10–30 °C per km of depth from the Earth's surface. Unusual magma intrusions, however, could have created greater localized heating.[71]

Geologists often refer to the temperature range in which oil forms as an "oil window".[73][74][71] Below the minimum temperature oil remains trapped in the form of kerogen. Above the maximum temperature the oil is converted to natural gas through the process of thermal cracking. Sometimes, oil formed at extreme depths may migrate and become trapped at a much shallower level. The Athabasca oil sands are one example of this.[71]

An alternative mechanism to the one described above was proposed by Russian scientists in the mid-1850s, the hypothesis of abiogenic petroleum origin (petroleum formed by inorganic means), but this is contradicted by geological and geochemical evidence.[75] Abiogenic sources of oil have been found, but never in commercially profitable amounts. "The controversy isn't over whether abiogenic oil reserves exist," said Larry Nation of the American Association of Petroleum Geologists. "The controversy is over how much they contribute to Earth's overall reserves and how much time and effort geologists should devote to seeking them out."[76]

Oil-eating bacteria biodegrade oil that has escaped to the surface. Oil sands are reservoirs of partially biodegraded oil still in the process of escaping and being biodegraded, but they contain so much migrating oil that, although most of it has escaped, vast amounts are still present—more than can be found in conventional oil reservoirs. The lighter fractions of the crude oil are destroyed first, resulting in reservoirs containing an extremely heavy form of crude oil, called crude bitumen in Canada, or extra-heavy crude oil in Venezuela. These two countries have the world's largest deposits of oil sands.[79]

On the other hand, oil shales are source rocks that have not been exposed to heat or pressure long enough to convert their trapped hydrocarbons into crude oil. Technically speaking, oil shales are not always shales and do not contain oil, but are fined-grain sedimentary rocks containing an insoluble organic solid called kerogen. The kerogen in the rock can be converted into crude oil using heat and pressure to simulate natural processes. The method has been known for centuries and was patented in 1694 under British Crown Patent No. 330 covering, "A way to extract and make great quantities of pitch, tar, and oil out of a sort of stone." Although oil shales are found in many countries, the United States has the world's largest deposits.[80]

Petroleum is used mostly, by volume, for refining into fuel oil and gasoline, both important primary energy sources. 84% by volume of the hydrocarbons present in petroleum is converted into fuels, including gasoline, diesel, jet, heating, and other fuel oils, and liquefied petroleum gas.[89]

Due to its high energy density, easy transportability and relative abundance, oil has become the world's most important source of energy since the mid-1950s. Petroleum is also the raw material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics; the 16 percent not used for energy production is converted into these other materials. Petroleum is found in porous rock formations in the upper strata of some areas of the Earth's crust. There is also petroleum in oil sands (tar sands). Known oil reserves are typically estimated at 190 km³ (1.2 trillion (short scale) barrels) without oil sands,[90] or 595 km³ (3.74 trillion barrels) with oil sands.[91] Consumption is currently around 84 million barrels (13.4×10^⁶ m³) per day, or 4.9 km³ per year, yielding a remaining oil supply of only about 120 years, if current demand remains static.[92] More recent studies, however, put the number at around 50 years.[93][94]

Closely related to fuels for combustion engines are Lubricants, greases, and viscosity stabilizers. All are derived from petroleum.

All pharmaceuticals are derived from petroleum, albeit via mutlistep processes. Modern medicine depends on petroleum as a source of building blocks, reagents, and solvents.[95] Similarly, virtually all pesticides - insecticides, herbicides, etc. - are derived from petroleum. Pesticides have profoundly affected life expectancies by controlling disease vectors and by increasing yields of crops. Like pharmaceuticals, pesticides are in essence petrochemicals. Virtually all plastics and synthetic polymers are derived from petroleum, which is the source of monomers. Alkenes (olefins) are one important class of these precursor molecules.

• Wax, used in the packaging of frozen foods, among others, Paraffin wax, derived from petroleum oil.[96]
• Sulfur and its derivative sulfuric acid. Hydrogen sulfide is a product of sulfur removal from petroleum fraction. It is oxidized to elemental sulfur and then to sulfuric acid.
• Bulk tar and Asphalt
• Petroleum coke, used in speciality carbon products or as solid fuel

In the 1950s, shipping costs made up 33 percent of the price of oil transported from the Persian Gulf to the United States,[100] but due to the development of supertankers in the 1970s, the cost of shipping dropped to only 5 percent of the price of Persian oil in the US.[100] Due to the increase in the value of crude oil during the last 30 years, the share of the shipping cost on the final cost of the delivered commodity was less than 3% in 2010.

Crude oil is traded as a future on both the NYMEX and ICE exchanges.[117] Futures contracts are agreements in which buyers and sellers agree to purchase and deliver specific amounts of physical crude oil on a given date in the future. A contract covers any multiple of 1000 barrels and can be purchased up to nine years into the future.[118]

• Global fossil carbon emissions, an indicator of consumption, from 1800.

    Total

    Oil
• Rate of world energy usage per year from 1970.[119]
• Daily oil consumption from 1980 to 2006.
• Oil consumption by percentage of total per region from 1980 to 2006:

    US

    Europe

    Asia and Oceania

  .
• Oil consumption 1980 to 2007 by region.

According to the US Energy Information Administration (EIA) estimate for 2017, the world consumes 98.8 million barrels of oil each day.[120]

This table orders the amount of petroleum consumed in 2011 in thousand barrels (1000 bbl) per day and in thousand cubic metres (1000 m³) per day:[121][122]

Source: US Energy Information Administration

Population Data:[123]

¹ peak production of oil already passed in this state

² This country is not a major oil producer

[[File:Oil producing countries map.png|thumb|center|upright=3.4|{{center|World map with countries by oil production from 2006 to 2012}]]

In petroleum industry parlance, production refers to the quantity of crude extracted from reserves, not the literal creation of the product.

In order of net exports in 2011, 2009 and 2006 in thousand bbl/d and thousand m³/d:

Source: US Energy Information Administration

¹ peak production already passed in this state

² Canadian statistics are complicated by the fact it is both an importer and exporter of crude oil, and refines large amounts of oil for the U.S. market. It is the leading source of U.S. imports of oil and products, averaging 2,500,000 bbl/d (400,000 m³/d) in August 2007.[126]

Total world production/consumption (as of 2005) is approximately 84 million barrels per day (13,400,000 m³/d).

In order of net imports in 2011, 2009 and 2006 in thousand bbl/d and thousand m³/d:

Source: US Energy Information Administration

Countries whose oil production is 10% or less of their consumption.

Source: CIA World Factbook

As of 2018, about a quarter of annual global greenhouse gas emissions is the carbon dioxide from burning petroleum (plus methane leaks from the industry).[128][129][note 1] Along with the burning of coal, petroleum combustion is the largest contributor to the increase in atmospheric CO₂.[130][131] Atmospheric CO₂ has risen over the last 150 years to current levels of over 415 ppmv,[132] from the 180–300 ppmv of the prior 800 thousand years.[133][134][135] The rise in Arctic temperature has reduced the minimum Arctic ice pack to 4,320,000 km² (1,670,000 sq mi), a loss of almost half since satellite measurements started in 1979.[136]

Ocean acidification is the increase in the acidity of the Earth's oceans caused by the uptake of carbon dioxide (CO₂) from the atmosphere.The saturation state of calcium carbonate decreases with the uptake of carbon dioxide in the ocean.[137] This increase in acidity inhibits all marine life—having a greater effect on smaller organisms as well as shelled organisms (see scallops).[138]

Oil extraction is simply the removal of oil from the reservoir (oil pool). There are many methods on extracting the oil from the reservoirs for example; mechanical shaking,[139] water-in-oil emulsion, and specialty chemicals called demulsifiers that separate the oil from water. Oil extraction is costly and often environmentally damaging. Offshore exploration and extraction of oil disturb the surrounding marine environment.[140]

Crude oil and refined fuel spills from tanker ship accidents have damaged natural ecosystems and human livelihoods in Alaska, the Gulf of Mexico, the Galápagos Islands, France and many other places.

The quantity of oil spilled during accidents has ranged from a few hundred tons to several hundred thousand tons (e.g., Deepwater Horizon oil spill, SS Atlantic Empress, Amoco Cadiz). Smaller spills have already proven to have a great impact on ecosystems, such as the Exxon Valdez oil spill.

Oil spills at sea are generally much more damaging than those on land, since they can spread for hundreds of nautical miles in a thin oil slick which can cover beaches with a thin coating of oil. This can kill sea birds, mammals, shellfish, and other organisms it coats. Oil spills on land are more readily containable if a makeshift earth dam can be rapidly bulldozed around the spill site before most of the oil escapes, and land animals can avoid the oil more easily.

Control of oil spills is difficult, requires ad hoc methods, and often a large amount of manpower. The dropping of bombs and incendiary devices from aircraft on the SS Torrey Canyon wreck produced poor results;[141] modern techniques would include pumping the oil from the wreck, like in the Prestige oil spill or the Erika oil spill.[142]

Though crude oil is predominantly composed of various hydrocarbons, certain nitrogen heterocyclic compounds, such as pyridine, picoline, and quinoline are reported as contaminants associated with crude oil, as well as facilities processing oil shale or coal, and have also been found at legacy wood treatment sites. These compounds have a very high water solubility, and thus tend to dissolve and move with water. Certain naturally occurring bacteria, such as Micrococcus, Arthrobacter, and Rhodococcus have been shown to degrade these contaminants.[143]

Because petroleum is a naturally occurring substance, its presence in the environment does not need to be the result of human causes such as accidents and routine activities (seismic exploration, drilling, extraction, refining and combustion). Phenomena such as seeps[144] and tar pits are examples of areas that petroleum affects without man's involvement.

A tarball is a blob of crude oil (not to be confused with tar, which is a human-made product derived from pine trees or refined from petroleum) which has been weathered after floating in the ocean. Tarballs are an aquatic pollutant in most environments, although they can occur naturally, for example in the Santa Barbara Channel of California[145][146] or in the Gulf of Mexico off Texas.[147] Their concentration and features have been used to assess the extent of oil spills. Their composition can be used to identify their sources of origin,[148][149] and tarballs themselves may be dispersed over long distances by deep sea currents.[146] They are slowly decomposed by bacteria, including Chromobacterium violaceum, Cladosporium resinae, Bacillus submarinus, Micrococcus varians, Pseudomonas aeruginosa, Candida marina and Saccharomyces estuari.[145]

James S. Robbins has argued that the advent of petroleum-refined kerosene saved some species of great whales from extinction by providing an inexpensive substitute for whale oil, thus eliminating the economic imperative for open-boat whaling,[150] but others say that fossil fuels increased whaling with most whales being killed in the 20th century.[151]

"Oil rents" have been described as connected with corruption in political literature.[158] A 2011 study suggested that increases in oil rents increased corruption in countries with heavy government involvement in the production of oil. The study found that increases in oil rents "significantly deteriorates political rights". The investigators say that oil exploitation gave politicians "an incentive to extend civil liberties but reduce political rights in the presence of oil windfalls to evade redistribution and conflict".[159]

Petroleum production has been linked with conflict for many years, leading to thousands of deaths due to these wars/conflicts.[160] Petroleum deposits are in hardly any countries around the world; mainly in Russia and some parts of the middle east.[161][162] Conflicts may start when countries refuse to cut oil production in which other countries respond to such actions by increasing their production causing a trade war as experienced during the 2020 Russia–Saudi Arabia oil price war.[163] Other conflicts start due to countries wanting petroleum resources or other reasons on oil resource territory experienced in the Iran–Iraq War.[164]

Peak oil is a term applied to the projection that future petroleum production, whether for individual oil wells, entire oil fields, whole countries, or worldwide production, will eventually peak and then decline at a similar rate to the rate of increase before the peak as these reserves are exhausted.[183] The peak of oil discoveries was in 1965, and oil production per year has surpassed oil discoveries every year since 1980.[184] However, this does not mean that potential oil production has surpassed oil demand.

It is difficult to predict the oil peak in any given region, due to the lack of knowledge and/or transparency in the accounting of global oil reserves.[185] Based on available production data, proponents have previously predicted the peak for the world to be in the years 1989, 1995, or 1995–2000. Some of these predictions date from before the recession of the early 1980s, and the consequent lowering in global consumption, the effect of which was to delay the date of any peak by several years. Just as the 1971 U.S. peak in oil production was only clearly recognized after the fact, a peak in world production will be difficult to discern until production clearly drops off.[186]

In 2020, according to BP's Energy Outlook 2020, peak oil had been reached, due to the changing energy landscape coupled with the economic toll of the COVID-19 pandemic.

While there has been much focus historically on peak oil supply, the focus is increasingly shifting to peak demand as more countries seek to transition to renewable energy. The GeGaLo index of geopolitical gains and losses assesses how the geopolitical position of 156 countries may change if the world fully transitions to renewable energy resources. Former oil exporters are expected to lose power, while the positions of former oil importers and countries rich in renewable energy resources is expected to strengthen.[187]

Unconventional oil is petroleum produced or extracted using techniques other than the conventional methods. The calculus for peak oil has changed with the introduction of unconventional production methods. In particular, the combination of horizontal drilling and hydraulic fracturing has resulted in a significant increase in production from previously uneconomic plays.[188] Certain rock strata contain hydrocarbons but have low permeability and are not thick from a vertical perspective. Conventional vertical wells would be unable to economically retrieve these hydrocarbons. Horizontal drilling, extending horizontally through the strata, permits the well to access a much greater volume of the strata. Hydraulic fracturing creates greater permeability and increases hydrocarbon flow to the wellbore.