Theory
As world oil exports approach (or pass) a global peak, the price of exported oil increases and further stimulates domesticHypothetical example
Given a hypothetical oil producing country (known by the model as an Export Land) that produces , consumes , and exports to oil consuming countries around the world, the model would be applied as such (illustrated in the graph above): :Export Land hits the point of Peak Oil production, and over a five-year period production drops by 25%. Over the same time period, Export Land's consumption increases by 20% to 1.2 mbpd. This causes Export Land's net exports over the five-year period to fall from 1 mbpd to 0.3 mbpd, a decrease of 70% -- resulting from a combination of increasing domestic consumption in Export Land and a 25% drop in production. Counter-intuitively, the fractional decline in exports is much greater than the sum of the fractional increase in domestic consumption and the fractional decline in production.Real-world examples
Several real-world nations exhibit the characteristics of the Export Land Model as pictured in the image gallery above. These four nations exhibit increasing domestic consumption along with declining production. Indonesia has already shifted from oil exporter to oil importer while Egypt is hovering on the brink. Malaysia and Mexico also have the hallmarks of the Export Land Model. Within 5 years, Mexico (the second biggest exporter of oil to the US) may become a net oil importer. Other nations where this may soon happen include Iran, Algeria and Malaysia. A recent report from CIBC World Markets also indicates that as much as 40% of Saudi Arabia's expected production increases will be offset by rising internal demand by 2010, and Iranian exports will decline by more than 50% for similar reasons. This report indicates that similar market pressures could reduce net worldwide oil exports by (about 3%). Nations may also reach their peak of oil production without fitting the Export Land model. For example, the United Kingdom began importing oil in 2006, after decades of exporting, due to declining production. But as domestic consumption in the UK has remained essentially unchanged for the last 20 years, their rising import levels essentially match their falling production levels. Similarly, Norway's exports began declining in 2001, but at the same rate as their production because their domestic consumption was also not growing. Unlike many exporters, these two countries don't subsidize local market oil price and have high fuel prices by world standards, as price from around the world http://www.dailyfueleconomytip.com/oil-prices/gas-prices-from-around-the-world-2//ref> thus one of the premises of the export land model (that domestic consumption should not be affected by world market price) does not apply to those countries.See also
*References
{{Peak oil Peak oil Petroleum politics