The International Monetary Fund (IMF) has warned in a report that the price of oil could double by 2022 – such an increase is predicted to hit the manufacturing industry hard.
The IMF commissioned a report to find out whether or not there was sufficient oil to delay a significant price hike in the near future. They found out that oil prices are likely to double over the next decade, despite the discovery of new sources. Findings from the report were described by one industry source as “terrifying”.
The authors of the report said: “While our model is not as pessimistic as the pure geological view that typically holds that binding resource constraints will lead world oil production on to an inexorable downward trend in the very near future, our prediction of small further increases in world oil production comes at the expense of a near doubling, permanently, of real oil prices over the coming decade.”
While the IMF predicts small further increases in world oil production, the research team said that a “near doubling, permanently, of real oil prices over the coming decade” is very likely.
“This is uncharted territory for the world economy, which has never experienced such prices for more than a few months,” said one member of the team.