A global oil crunch could be on its way, hitting the industry by 2015 according to the World Bank.
Consultant on Oil and Energy Affairs for the Bank, Dr Mamdouh Salameh was forthright in his opinions on the impending disaster when he addressed delegates at the 17th Annual Energy Conference, hosted by the Emirates Centre for Strategic Studies and Research.
Dr Salameh claimed that drastic changes to oil fundamentals during the 1990 had meant the oil market was now facing severe tightening and this, combined with the growth of the Chinese market and the waning influence of OPEC, meant the world was heading for an oil crunch more severe than 2008.
During his speech, Dr Salameh was highly critical of OPEC, stating that the organisation's handling of the 2008 crisis - when the oil price reached $150/barrel - did not bode well for the current situation. He stated that OPEC needed to decide whether to significantly increase supply or risk "becoming irrelevant".
He accused OPEC members of failing to adhere to agreed quotas and, with oil prices projected to remain high, this would have a significant impact on the quota system as a whole. He also projected that prices could top $170/barrel if the issue wasn't addressed quickly.
The World Bank view was reflected in comments by other speakers, including those of the UAE's Minister of Energy, His Excellency Mohammed Bin Dha'en Al-Hamli, who stated that the importance of fossil fuels could not be threatened by other alternatives, but that high prices were the result of "financial mismanagement and irresponsibility". He added that the short to medium-term outlook was "clouded by uncertainty" and that the developing world will become the focus for the world economy.