An oil crunch is going to threaten the global economy within five years, and it could be worse than the recent credit crunch, says Sir Richard Branson, founder of the Virgin Group.
Branson and other British executives reportedly are warning officials to prepare and not just listen to oil companies and producers who say there is nothing to worry about.
“The next five years will see us face another crunch — the oil crunch,” Branson said in a document obtained by The Guardian.
“Our message to government and businesses is clear: act.” Branson says.
“Don't let the oil crunch catch us out in the way that the credit crunch did.”
Saudi Arabia has said that there is enough oil in the ground to meet demand.
“The concern about peak oil is behind us,” Khalid al-Falih, head of Saudi Arabian state-owned oil company Aramco said recently, according to Reuters.
The peak oil theory is that oil supply is at or near its peak gained steam when prices zoomed to a record of nearly $150 a barrel in 2008.
“Of the 4 trillion (barrels) of oil the planet is endowed with, only 1 has been produced,” says Falih.
“Granted most of what remains is more difficult and complex (to exploit) ... there's no doubt we can do a lot more than the 95, 100 (million barrels) that are projected in the next few decades.”
Some oil company executives are not as optimistic.
Total's chief executive Thierry Desmarest has said the world would struggle to produce more than 95 million barrels per day in the future — 10 percent above present levels.
“The problem of peak oil remains,” Desmarest said recently, according to Reuters.
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