Oil at $100 per barrel by 2010-2015: IAEA chief

30 December 2008

The International Energy Agency's chief economist Fatih Birol has said that oil prices could well be back around the $100-per barrel mark some time between 2010 and 2015. The Paris-based International Energy Agency (IEA) is an energy advisor to 28 industrialised nations.

Speaking at an energy conference, Birol said 2009 would be marked by downward pressures on oil prices, but in his view, they would move up again in 2010 once the world economy starts to recover from the economic downturn. Reports have suggested that oil prices are set to register around 60 per cent losses, making it the biggest largest fall since futures trading in the commodity started two and a half decades ago.

The outbreak of hostilities between Irrael and Hamas have driven oil prices above $40 a barrel at the start of this week, which is higher by almost eight per cent as compared to the previous session. Tensions in the Middle East region, which is the main supplier of the world's oil, have a direct bearing on the price of the commodity.

Birol also said that energy investments have taken a hit around the world from the global economic crisis, with projects to explore and develop oil fields being put off. He said that on account of these postponements of investments, a major demand-supply problem would come to the fore by around 2010.

Birol said that the market would transition from being dominated by multinational oil companies to one where national companies would call the shots, as he thought that 80 per cent of the increase in oil and gas production by 2030 would be driven by national companies. This would also see oil and gas prices "zig zag" more in the future.

While the media reported many analysts as predicting a bleak outlook for oil during the short term, the long term, they say, would see a doubling, tripling, or quintupling of prices over the course of the next few years.