The time at which the rate of extraction of oil from the reserves ceases to rise.

Logically, the quantity of oil in the planet's oil fields is limited. There will come a time when no new oil is being discovered. There are already reports that the oil companies have not found new fields to replace those they are depleting. At the same time the number of people wanting to burn oil is increasing rapidly as China and India develop their industry. The demand for oil is increasing while the ability to extract it from the ground and refine it is not increasing rapidly. If the point of peak oil has occurred then unless demand starts reducing (by the development of alternatives to oil) the price will increase far beyond what it has been recently ($120 per barrel - 22 April 2008).

The world economy will undergo considerable changes, as so much of it has been created with the assumption of cheap and unlimited oil supplies. Presumably the oil will have to be replaced with other energy sources, but demand will also have to be reduced, either by price or by rationing. Perhaps low density suburbs will become too expensive to live in. It is not at all clear that any alternative source of energy can be used for private transport. The automobile, and all the structures associated with it may be headed for extinction, at least on the scale it is used at present. The same may be true of much of the present aviation industry.
Home Planet article

This article says Peak Production occurred in 2006. Many think that the rapid increase in price during 2008 is an indicator that Peak Oil has already occurred.

The Long Emergency



La fin du pétrole : Le vrai défi du XXIe siécle