PO-driven price increases during partial recoveries (like the one we're in now) will play a role in triggering successive deeper waves of recession, especially in the more vulnerable oil-dependent nations. This will probably take the form of a descending series of saw-toothed, stair-step partial recoveries followed by ever deeper troughs of recession/depression.
However, most people are unlikely to connect this situation with PO, instead blaming financial malfeasance, political shenanigans and commodity speculators. All of those are legitimate complaints, but underneath it all runs the non-negotiable physical reality of limited liquid fuel supplies. Add in the impact of climate change on food production and we're looking at an unholy world-wide mess.
If this assessment is correct - especially with the additional whammy of declining net oil exports - we won't need a rapid drop in production to trigger global chaos. After all, we're seeing chaos now, and we're still on the peak plateau - production hasn't even started to fall yet, it has just stopped climbing.
The big question for me is how this will play out in various countries, since each one has a different set of resources, economic status, political climate, social contract and military capability. As much as we would prefer a clear view into the crystal ball, specific predictions are impossible, but one thing seems sure - Robert Hirsch was right back in 2005, we're in for at least a couple of decades (and possibly more) of very hard times.
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