The price of crude oil could bounce back to as high as $200 a barrel without sufficient investment to develop new fields, Opec has warned.
Speaking with The Telegraph, Opec secretary general Abdalla Salem el-Badri says any production cuts would lead to rampant price increases.
Oil companies have been forced to make cutbacks by the slide in oil prices, with BP announcing more than 1,000 job cuts since December.
But el-Badri says: “If we cut production then there will be spare capacity and producers will not invest, or postpone projects. The market will rebound back higher than the $147 we saw in 2008.”
The price of Brent crude oil is currently at $48 a barrel, down 57 per cent from $112 in June, having slipped again on Monday following the death of Saudi ruler King Abdullah.
Much of the decline in oil prices since the summer has been blamed on Opec’s decision to maintain production levels in November.
In recent times Opec has tackled a declining market share by allowing prices to fall to eliminate rival producers including Russia and the US.
The International Energy Agency says production in non-Opec countries has begun to slow, with the watchdog revising down its estimate by 350,000 barrel per day. The US oil rig count also saw its sharpest weekly fall in 24 years earlier this month.