IEA probes fears that oil will run out

Inquiry will examine ‘narrow margin’ in 2012

The International Energy Agency has ordered an inquiry into whether the world could run out of oil, The Observer has learnt. It will consider whether fears about global shortages are real.

Observers say that the IEA, which provides authoritative research to OECD countries, is concerned that the supply of oil could fail to keep up with demand driven by the fast-industrialising economies of China and India. The investigation comes at a time of mounting concern that the sky-high price of oil could derail the global economy and plunge the world into recession. Oil hit $135 a barrel last week, the highest price on record, forcing airlines to cut back on flights to save fuel and pushing up the cost of living around the globe.


Lawrence Eagles, head of oil markets research at the IEA, said the situation was complex but added: ‘Our findings will form part of short- and long-term forecasts that we intend to publish in July and November. Up to now we have believed that supply can cope with demand. One caveat is that we don’t know for certain whether estimates of reserves in countries such as Saudi Arabia are entirely accurate.’

John Waterlow, analyst at oil research consultancy Wood Mackenzie, said: ‘Many oil-producing countries are closed, secretive societies where it can be difficult to pinpoint the level of provable reserves.’

Observer