'After all, if they are unable to produce as much oil, they will be the first to know.'

A good point well made. Many of the OPEC countries consistently upped their reserves throughout the 1980s and 1990s despite little exploration and very high production figures. The reason being that production quotas are allocated on reserves - the more oil you say you have, the more you can pump. Almost none of these countries allow for independent audits of their reserves - one reason why global oil reserve numbers vary so widely, so we really don't know how much oil is down there.

Three years ago, Kuwait finally admitted that it's supergiant Burgan field had peaked and was in steep decline from 2 million barrels per day to around 1.6 million today - and that was being maintained by huge injections of water. As for what is going on in Saudi Arabia, that's anyone's guess - it's probable their Ghawar field (5 million barrels per day - around 6% of global demand) has or is peaking.

Which if that's the case means there is no more spare capacity - all the leaders in the world can ask OPEC to open the taps, but they can't open them any wider. So oil will have to go up in price. Fortunately, (for the Chinese and Indians, less so for the US and the UK) the Chinese and Indians have lots of hard cash to spend on fuel imports. Money which when it isn't greasing the wheels of corruption, gives various Persian Gulf regimes all the more cash to spend on new nuclear plants and armaments.

And we can forget any other countries coming up to fill the gap. Even if the huge new Tupi field off of Brasil turned out to be as productive as hoped, it would only ever supply 110 *DAYS* of the current global demand for oil (just under 30 billion barrels a year).

Fancy a spot of depressing reading? Matthew Simmons, 'Twilight in the Desert' will have you checking property prices in Idaho.