<P> Peak oil is the period when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline . It relates to a long - term decline in the available supply of petroleum . This, combined with increasing demand, will significantly increase the worldwide prices of petroleum derived products . Most significant will be the availability and price of liquid fuel for transportation . </P> <P> The US Department of Energy in the Hirsch report indicates that "The problems associated with world oil production peaking will not be temporary, and past "energy crisis" experience will provide relatively little guidance ." The 2014 United Nations World Economic Situation and Prospects report notes that "Oil prices were on a downward trend in the first half of 2013 (after a spike in January and February caused by geopolitical tensions with Iran), as global demand for oil weakened along with the deceleration in world economic growth overall ." </P> <P> According to the United Nations, world oil demand is projected to reach over 99 million barrels per day in 2018 . </P> <P> A major rise or decline in oil price can have both economic and political impacts . The decline on oil price during 1985--1986 is considered to have contributed to the fall of the Soviet Union . Low oil prices could alleviate some of the negative effects associated with the resource curse, such as authoritarian rule and gender inequality . Lower oil prices could however also lead to domestic turmoil and diversionary war . The reduction in food prices that follows lower oil prices could have positive impacts on violence globally . </P>

What determines the price of brent crude oil