A global decline in oil production will have serious social and economic implications without due preparation. Global economic growth relies on cheap energy, and oil contributes significantly to the worldwide energy pool, particularly for transportation. A decline in energy supply would likely slow, if not reverse, growth.

Initially a peak in oil production would manifest itself as rapidly escalating prices and a worldwide oil shortage. This shortage would differ from shortages of the past because the fundamental cause is geological, not political. While past shortages stemmed from a temporary insufficiency of supply, crossing Hubbert's Peak means that the production of oil continues to decline. Demand must be reduced to meet supply. The effects of such a shortage depend on the rate of decline and the development and adoption of alternatives. If alternatives are not forthcoming, then the many products and services produced with oil become scarcer, leading to lower living standards in all countries. Scenarios range from doomsday scenarios to relatively minor problems thanks to new technologies. In order to deal with problems from peak oil, Colin Campbell has proposed the Rimini protocol.

It is unlikely that the actual peak in global oil production will be the direct catalyst of global economic decline. Instead, severe economic turbulence will be precipitated by the realization of the financial and investment world that "peak oil" (and natural gas) is a real phenomenon, and is either imminent or has already occurred. Significant indications of economic volatility have manifested themselves in the largest increase in inflation rates in 15 years (Sept. 2005), due mostly to higher energy costs. Since natural gas is the single largest feedstock used to produce fertilizers, an increase in natural gas prices could provide upward pressure on food costs, in addition to the increase in the transportation component of food prices.

However, these likely cumulative impacts of peaking oil, exacerbated by global competition over scarce remaining oil supplies, have led many analysts to predict dire consequences for conventional oil-dependent economies. According to oil industry analyst Jan Lundberg, "Based on today's intensifying trends, warning signs and an understanding of history, one must be ready to see the fossil-fueled phase come to an end most abruptly. When common practices cannot be maintained and too many people suddenly begin hoarding scant supplies, the desired resource dries up. This causes ramifications that quickly compound whatever triggered the crisis." This scenario is referred to by Lundberg as Petrocollapse.

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