Only a collapse in the global demand for oil can save economies from a supply crisis and crude prices reaching more than $200 a barrel, according to a report out today.
Energy expert Paul Stevens says that governments and companies are investing too little to meet future needs and a "supply crunch" will hit within "five to 10 years."
His report, for the Chatham House think tank, dispels hopes that the recent 20pc fall in the oil price from its $147.27 peak might herald a return to more manageable levels. "A spike of over $200 is possible," Mr Stevens concludes.
Mr Stevens, emeritus professor at Dundee University, believes that not enough money and expertise were invested in the 1990s to maintain the capacity needed to satisfy present trends in oil consumption.
While there is plenty of oil in the ground, there is not enough going on above ground to convert these resources into "producing capacity".
He blames, in part, international oil companies for spending too much on dividends to shareholders rather than re-investing.
Another factor is that some governments are "starving" their national oil companies of investment funds.
Mr Stevens says that members of the Opec oil cartel have failed to meet plans for capacity expansion since 2005.
He writes: "In reality, the only possibility of avoiding such a crunch appears to be if a major recession reduces demand - and even then such an outcome may only postpone the problem."
Mr Stevens warns about the long lead times between introducing policies, and their impact on demand.
"Only extreme policy measures could achieve a speedy response, and these are usually politically unpopular," he writes.
The price of Brent crude for September delivery was $1.19 higher at $118.19 in late trading yesterday.
