Oldie but goodie 2007 posting – “Oil Supply Crisis in five years”

I'm sure that as economies in Asia grow, this is a very real possibility.

Oil experts see supply crisis in five years | Business | Money | Telegraph

The International Energy Agency has predicted a supply crunch in the world's oil markets that could send prices soaring and place a severe dent in global growth.

In a report that painted a bleak outlook for the global economy, the IEA said spare capacity in oil production would dry up over the next five years, even as demand continues to jump significantly.

"Oil and gas price pressures look set to remain in the coming years," the report said. "Slower-than-expected GDP growth may provide a breathing space, but it is abundantly clear that if the path of demand does not change on its own, it may well be driven to change by higher prices."

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Lawrence Eagles, head of the IEA's oil industry and markets division, said: "The results of our analysis are quite strong. Either we need to have more supplies coming on stream or we need to have lower demand growth."

But with forecasts of world economic growth of 4.5pc a year, the report argued that oil demand was likely to soar to 95.8m barrels a day in 2012 from 81.6m barrels this year.

At the same time it predicted production from the international oil cartel Opec would fall, slipping by 2m barrels a day in 2009, and it also cut supply forecasts for non-Opec countries by 800,000 barrels.

Some analysts say the agency is being alarmist and that its warnings about supplies are actually leading to higher prices. They claim that the world economy has changed so much since the oil crises of the 1970s that companies and consumers are better able to deal with high oil prices.

However, Mr Eagles said: "The simple thing is we are there to project the market as we see it. The price response is due to fundamentals. We are simply pointing out the fundamentals – that's our job."