Peak Oil Theory suggests that global oil production will reach its maximum level, after which it will gradually decline. This concept is based on the observation that oil extraction follows a bell-shaped curve, where production increases until it peaks and then decreases as reserves are depleted. The theory highlights concerns about energy supply and economic stability, as declining oil production can lead to higher prices and potential shortages. It emphasizes the importance of finding alternative energy sources and improving energy efficiency to mitigate the impacts of reduced oil availability in the future.