A winter of soaring oil prices is threatening to boost inflation, hit motorists and hamper the global economic recovery, industry experts have warned.
Delays in bringing Iraqi exports back on line and tight Opec quotas mean the average cost of Brent crude per barrel this year could be the highest since the $29.55 seen in 1983.
David Fyfe, oil supply analyst at the International Energy Agency, said rising demand and continued uncertainty over supply suggested prices would remain ‘towards the top end’ of Opec’s $22-$28 range.
Rob Laughlin, oil analyst at GNI Man Financial, said a continuation of production problems in Iraq, Nigeria and Venezuela could see oil prices finish the year above $30.
Economists warn this could seriously hinder the recovery prospects for major Western economies as higher petrol prices bite into motorists’ income and companies spend more on fuel.
Rough estimates suggest countries lose 0.5% of their gross* domestic product for every US$10 increase in the cost of oil. The high oil price has pushed UK inflation above 2.5% for the past nine months.
>From This Is Money