The world may be headed for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production. The scenario may come true according to Dr. Fatih Birol, the chief energy economist at the respected International Energy Agency (IEA). The IEA is charged with the task of assessing future global energy supplies by countries of the OECD – Organization for Economic Cooperation and Development.

Recently, the IEA conducted the first-ever assessment of the world’s major 800 oil fields, which cover three quarters of global reserves. The IEA found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by both oil companies and oil-producing countries. This problem has only been exacerbated the financial crisis and the credit crunch.

Dr. Birol is warning that global oil production is likely to peak in about ten years, much earlier than most governments had estimated. He also said that we may see an “oil crunch” within five years. This “crunch” will be caused not only by decreased production of oil but also by lower exports of oil from oil producing countries. Much more of the oil produced, for example, by countries in the Middle East will be required to meet the needs of their own booming economies.

Dr. Birol estimates that even if demand remained steady, the world would have to find the equivalent of four Saudi Arabias to maintain production, and six Saudi Arabias if it is to keep up with the expected increase in demand between now and 2030. How can investors take advantage of this upcoming oil crunch? Obviously, one could invest in ‘green’ energy companies. However, if one wanted to stay invested in the oil industry, there are still numerous investments available.

One could invest in some of the few major oil companies that are actually increasing their reserves. Examples include foreign energy giants Petrobras (NYSE: PBR) and CNOOC (NYSE: CEO).

Another area that is ripe for investment are energy service companies which aid companies like Petrobras in producing oil. Examples include Transocean (NYSE: RIG) and National Oilwell Varco (NYSE: NOV). A related alternative is an oil service ETF such as Powershares Dynamic Oil & Gas Services (NYSE: PXJ).

An oil crunch is highly likely within a few years. Investors should be making preparations for it now.