World oil production peaked last year and is projected to fall by half in 2030, according to a new report.

German-based Energy Watch Group, a network of independent scientists and parliamentarians, released Monday the report, Crude Oil: the Supply Outlook, which concluded that global oil production peaked at 81 million barrels a day or Mb/d in 2006, much earlier than many experts had forecast.

The report, which comes only days after oil prices hit record highs, is also predicting that global oil production will begin to fall several per cent each year and that by 2030 it will be 39 Mb/d.

Hans-Josef Fell, the group's founder and a German MP, told the Guardian, "The world soon will not be able to produce all the oil it needs as demand is rising while supply is falling. This is a huge problem for the world economy."

The report's authors said the current way of dealing with energy issues will have to change fundamentally.

EWG's projections paint a different picture than the ones made by the International Energy Agency, which until recently denies that such a fundamental change is likely to happen in the near to medium-term future.

The report said IEA's message, namely that business as usual will be possible in the future, sends a false signal to policitians, industry and consumers.