If oil prices continue to rise, the world could be plunged back into recession. That’s the warning form the International Energy Association’s Chief Economist, who said that oil price spikes have preceded each global recession since the early 1970s.
Dr. Fatih Birol, IEA Chief Economist said: “The current price levels are on average higher than the awful year of 2008, and as such have the capacity to tip the global economy back into recession.”
IEA research predicts that if oil averages $120 (£75) a barrel in 2012, the global oil import burden – the total spending by countries on net imports of oil – is set to reach a record high of over $2 trillion (£1.25tr), which is likely to put more pressure on countries suffering from economic woes.
Economists also say the rise in oil prices since 2009 has been magnified in some countries by a fall in the value of the local currency – especially the euro against the dollar.