Peak oil is the idea that at some point an oil well, an oil field, a country, or the world, will be producing the most crude oil it can ever produce at one time. After this point, less oil will be produced and therefore people will have to use less oil because it will cost more money. Many scientists and governments are concerned about what will happen when there is less oil to go around.
The first person to come up with this idea was M.K. Hubbert in the 1950s and 1960s, who said that a graph of oil production looks like a curve (which we now call Hubbert's Curve). Hubbert drew a graph in 1956 that predicted that the United States would reach its peak oil in the early 1970s. The United States did indeed reach its peak oil in the early 1970s.
It is unclear as to when the world's peak oil will happen, though many scientists agree that it was reached in the early 2000s or will be reached before 2020. For example, in 2010 the International Energy Agency (IEA) has said that peak oil may have happened in 2006.