Oil prices could double by 2022: IMF

The International Monetary Fund (IMF) has been warned by its internal research team that there could be a permanent doubling of oil prices in the coming decade with profound implications for global trade.


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The International Monetary Fund (IMF) has been warned by its internal research team that there could be a permanent doubling of oil prices in the coming decade with profound implications for global trade. “This is uncharted territory for the world economy, which has never experienced such prices for more than a few months,” the report warns.

The new IMF “working paper” came as the value of crude on world markets remains at the historically high level of US$113 a barrel and just after the International Energy Agency reported that consumption would accelerate for the rest of this year in line with a wider economic recovery.

Meanwhile, the Paris-based International Energy Agency, which advises industrialised nations, including the UK on energy policy, said crude prices would remain high in 2012, due to tensions between Iran and the west. “The path of market fundamentals for the rest of the year remains highly uncertain and geopolitical risks will likely continue to keep prices high,” the agency said.

The agency believes that a period of declining demand – triggered by the slowdown in the global economy – is now over and the upward trajectory resumed. The Opec oil cartel made similar statements a week ago, saying that oil demand growth had “stopped its declining trend”.