(12PressRelease.com) Nikkei Financial expressed concerns that demand for oil could outstrip supply as soon as 2015, a turn of events that would send ripples through nearly every economy and industry in the world.
Senior Analyst at Nikkei financial, Tokyo, recently expressed concerns facing the UK economy and itâ€â„¢s growing dependence on imported oil, coal and gas, and was quoted as saying;
â€Å“Everyone seems to have overlooked the elephant in the room. How are you (UK Government) going to pay for oil imports? The pound sterling is underwater and unlikely to improve its value over the long term, especially now the pound has lost itâ€â„¢s petrocurrency status. The UKâ€â„¢s financial services may never fully recover its once stellar money making magic. The UK doesnâ€â„¢t make anything other people will buy to earn foreign currencies.
This statement was made following recent comments made by Richard Branson and fellow leading businessmen warning ministers recently that the world is running out of oil and faces an oil crunch within five years.
"The next five years will see us face another crunch â€â€œ the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well," Branson said.
"Our message to government and businesses is clear: act, "he says in a foreword to a new report on the crisis. "Donâ€â„¢t let the oil crunch catch us out in the way that the credit crunch did."
The issue came up at the recent World Economic Forum in Davos where Thierry Desmarest, chief executive of the Total oil company in France, also broke ranks. The world could struggle to produce more than 95m barrels of oil a day in future, he said â€â€œ 10% above present levels. "The problem of peak oil remains."
Chris Skrebowski, an independent oil consultant who prepared parts of the peak oil report for Branson and others, said that only recession is holding back a crisis: "The next major supply constraint, along with spiking oil prices, will not occur until recession-hit demand grows to the point that it removes the current excess oil stocks and the large spare capacity held by Opec. However, once these are removed, possibly as early as 2012-13 and no later than 2014-15, oil prices are likely to spike, imperilling economic growth and causing economic dislocation."
Skrebowski believes that Britain is particularly vulnerable because it has gone from being a net exporter of oil, gas and coal to being an importer, and is becoming increasingly exposed to competition for supplies, a view also expressed by Nikkei Financial, Zelda Phillps Senior Analyst said;
"This is likely to put pressure on the UK balance of payments and in a world of floating exchange rates is also likely to put downward pressure on the valuation of sterling. In other words, the positive benefits to the valuation of the pound as a petrocurrency are now eroding, meaning higher inflation, lower standards of living particulary for the poorest areas of the UK"
â€Å“One thing for sure, is that key investments in energy generation must be done now before the devaluation of your money makes it impossible to do so in the not too distant future.â€