Stuart Staniford at the Oil Drum takes a close look and see the world's largest oil field in decline.
...Saudi oil production has been falling with increasing speeed since summer 2005, and overall, since mid 2004, about 2 million barrels of oil per day in production has gone missing (about 1mbpd in reduction in total production, and about another 1mbpd in that two major new projects, Qatif and Haradh III, failed to increase overall production). That's 2.5% of world production and, if that production hadn't gone missing, gasoline in the US likely would still be somewhere in the vicinity of $2/gallon instead of well over $3.
I will analyze six or seven separate lines of technical evidence, and argue they all point to a consistent picture, which says that the answer to both questions is "Yes". Yes, the northern half of Ghawar is quite depleted. And yes, this probably explains at least part of recent production declines. Furthermore, it is likely that more declines in Saudi production are on the way.
So is peak oil almost here? This is a maddeningly difficult question, even, apparently, for experts. To me it doesn't look like the markets believe that it is. If I had some oil and I thought the world was running low, what would I do? I would probably start pumping less, knowing that the longer I waited, the more it would be worth. That might even be what the KSA is doing.
On the other hand, if I was an old, corrupt autocrat sitting on a Kingdom full of angry young men radicalized by decline in living standards and religious rage, my point of view might have less to do with long term economics. Saudi Arabia has seen its population explode and it's per capita GDP fall as a result.
How about other sources? The old Russian fields are probably in decline. Iran, Iraq, Nigeria, and Venezuela are all problematic for reasons of stability.
So why aren't markets crazy? It seems to me that they don't really believe that peak oil is close. I guess we shall see. But read Staniford and make your own conclusions.