There's been a lot of stale argument recently about oil – is it running out? Are we approaching/at/passed Peak Oil (the point when global oil production goes into irrevocable decline)? Business, unsurprisingly, isn't waiting for the answer; it's working out what will happen next.

Take the recent report from Deutsche Bank, entitled 'The Peak Oil Market: Price Dynamics at the End of the Oil Age'. This describes a world where the effect of failing global reserves is compounded by incoherent politics. If the US Government was honest about the cost of oil, for example, it would slap another 50c on a gallon of gasoline to pay the cost of the war in Iraq. Ludicrously, as global oil supplies dwindle, the increasingly precious part that remains is concentrated in the hands of those who give it away to their citizens for almost nothing – Saudi Arabia, Venezuala, Iran, Iraq.


Governments should be planning how best to manage the limited supply of oil sensibly, for the long-term, the bankers write: 'We believe, based on the history of the past decades, years, and months, that they will do the exact opposite.'

As a result, oil demand – and price – will continue to spiral upwards to a peak in 2016, when a barrel will cost about $175 (it is just under $80 today). At that point – at that price – our addiction will be broken as people turn instead to cheaper alternatives already gaining ground today, natural gas and the electric car.