London: Oil prices could reach $150 per barrel in the near term if investment in the Middle East and North Africa (MENA) oil-producing region falls significantly, the International Energy Agency (IEA) said on Wednesday.
IEA said world demand for oil would rise steadily over the next two decades to around 99 million barrels per day by 2035, and investment in new production would have to keep up.
An oil pump jack stands outside of Watford City, North Dakota, US. Photo: Bloomberg.
“If between 2011 and 2015 investment in the MENA region runs one-third lower than the $100 billion per year required, consumers could face a near-term rise in prices to $150 per barrel,” IEA said in its annual World Energy Outlook.
Oil prices have been historically high this year, with North Sea Brent crude oil futures averaging well over $100 per barrel, partly due to the loss of oil production from Libya during its civil war.
IEA chief economist Fatih Birol said high oil prices threatened to curb economic growth worldwide.
“In 2011, $102 is the average price through to today, which means the global economic recovery is at risk. We are in the danger zone for the global economy at current levels,” Birol said. “There is a possibility that production growth from the (MENA) region may not be what the consumers would like to see. This would be a pity for the global economy, a pity for the oil sector and a pity for those governments.”
“Oil prices by 2015 may go to $150 in real terms and $176 in nominal terms (if investment is too low),” he said.
In the short term, IEA said pressures on oil prices were easing as Libyan oil began to return to the world market and as global economic growth slowed.