as population grows demand goes up. When demand is unable to be supplied then it becomes a supply issue.
But supply problems only happen when their isn't enough product.
Right now, the good sweet crude is just about gone, however, there is lots of the sour sulfur rich crappy crude left. That is the rub. That sour stuff is harder to get to. It takes longer to refine, more money to refine and is locate in tar sands, shale and in some of the deepest regions in the ocean (huge pressures and heat require new tech to be able extract it). More over, the larger fields are running out or fouling and require new tech to refine the fouled crude.
We have passed peak in production, meaning the world is hard pressed to get more out of the ground with current tech. That is where meeting demand becomes a problem. Next will be the failing of the smaller reserves and the inability to find adequate new fields to supplement the loss. That is when things get really scary.
We are just at the beginning of plateau. We will have a really bumpy ride for a few years. When the good stuff is all gone an we have to count on only the sour stuff to fuel our needs then things will begin to drop fast.
this is why many of the current models show that around 2020 as being the break point. But that is also contingent on the worlds economy bouncing back and the need for oil increases.
This is the main reason why Peak Oil hasn't hit us full bore just yet. The recession/depression has been a blessing of sorts because in a down economy, people use less raw materials, thus delaying Peak.
Ironically, the debt crisis in Europe might mitigate Peak even further. Which opens up a paradox, during this time nations could be exploring alternative means for power, yet, because of the bad economy, nations don't have the capital to spend to explore those other means. It becomes a snake feeding on it's tail.
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