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Page added on November 9, 2011
Oil prices are in ‘danger zone’, warns the IEA
Oil could hit $150 a barrel soon if investment in the Middle East and North Africa fails to rise with demand, the International Energy Agency (IEA) says.
Prices have remained high throughout 2011, partly due to Libyan unrest.
“We are in the danger zone for the global economy at current levels,” said IEA economist Fatih Birol.
The IEA also wants more investment in green technology, warning that the world is heading down an “insecure, inefficient and high-carbon” path.
“Growth, prosperity and rising population will inevitably push up energy needs over the coming decades,” said IEA executive director Maria van der Hoeven.
“But we cannot continue to rely on insecure and environmentally unsustainable uses of energy.”
In its annual World Energy Outlook, the agency says that as years pass without clear economic drivers towards clean energy investment, the “lock-in” of high-carbon infrastructure makes it progressively harder to meet energy security and climate goals.
Oil rising
The agency warned that oil prices could keep rising through $150 a barrel in just a few years’ time towards $212 a barrel by 2035, as the world supply becomes dependent on a small group of suppliers in North Africa and the Middle East.
One-month futures for Brent crude have averaged more than $100 a barrel for 2011 so far.
But despite the end of the conflict in Libya, the IEA says there is a possibility that production growth from the Middle East and North Africa (MENA) will not be sufficient to meet demand over the next few years.
“If, between 2011 and 2015, investment in the MENA region runs one-third lower than the $100bn per year required, consumers could face a near-term rise in the oil price to $150 per barrel,” said the IEA.
In the longer term, the industry faces declining output from existing fields and rising demand from developing countries.
“We have to find and develop two new Middle Easts, that’s a tall order,” said Mr Birol.
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4 Comments on "Oil prices are in ‘danger zone’, warns the IEA"
Kenz300 on Wed, 9th Nov 2011 10:26 pm
The world economy was built on cheap oil. That is coming to an end. The growth of the economy will slow with higher energy prices causing the slow down. Our economic security and national security will depend on a transition away from oil and high oil prices. Higher prices are coming. Will we be ready? How will higher oil prices impact individuals, business and economies? Is higher unemployment coming? Will high oil prices cause you to lose your job?
BillT on Thu, 10th Nov 2011 1:21 am
Higher oil prices will only drop if there is another depression, because demand will also drop. As for transitioning away from oil…yes we can, some, but not most. So, our option is to cut use across the board. That will cut growth and lifestyle. Too bad, but, the oil party is over. Now we have the hangover.
BillT on Thu, 10th Nov 2011 1:22 am
“We have to find and develop two new Middle Easts, that’s a tall order,” said Mr Birol.”
That’s impossible…said BillT.
Gale Whitaker on Thu, 10th Nov 2011 3:30 am
The republicans & their oil lobby will make sure that we are not prepared. We have to throw out capitalism & globalization & work toward restoring the damage we have done to the earth. When will humans come to the realization that we were not created by god. Humans are a silly accident and will soon go the way of the dodo bird.