Commodity Online
PARIS : Oil prices would hit the $200 mark by the year 2030 if the situation remains like this, said the Paris based International Energy Agency in its annual World Energy Outlook report.

The cartel said that oil prices would swing wildly until 2015 at an average of more than 100 dollars before soaring above the 200-dollar mark by 2030.

The IAE said there would be enough oil for decades to come but warned that global prosperity and the state of the planet hang on radical change in energy production and usage.

The world's energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable environmentally, economically and socially, it said.

The IEA said the world will continue to be massively dependent on oil and gas for a long time but there are enough resources to meet rising demand for many years to come.

Most of the growth in production will come from the Middle East, Africa and Russia and most of the growth in demand and carbon emissions from China, India and the Middle East.

The agency said its predictions on the future price of oil represented a major upward adjustment from its forecasts last year, owing to a review of the outlook for production costs and demand.

Financial crisis and economic slowdown would probably bear down on demand for oil and on prices, it said, but they were expected to rise steadily after 2015.

Global spending on oil soared from 1.0 percent of global gross domestic product in 1998 to about 4.0 percent in 2007, hitting hard at consuming countries. It was expected to stabilise at 5.0 percent, but for non-OECD countries it would be 6.0-7.0 percent.

The only comparable period of such high spending was in the early 1980s when it exceeded 6.0 percent.

"Oil is the world's most vital source of energy and will remain so for many years to come," the report said. "The immediate risk to supply is not one of a lack of global resources, but rather a lack of investment where it is needed."

There is enough oil in the world to feed the expected rise in production beyond 2030. "The world is not running short of oil or gas just yet," the IEA reassured.

Estimates of remaining proven reserves of oil and natural gas "range from about 1.2 to 1.3 trillion barrels" and had almost doubled since 1980. "This is enough to supply the world for over 40 years at current rates of consumption."

But the amount of oil discovered rose each year because of increased activity and improved technology. However, there was great uncertainty about the rate at which production would fall from fields as they matured.

The agency said that on its benchmark estimates, world primary energy demand would grow by 1.6 percent a year from 2006 to 2030, or an overall increase of 45 percent.

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