IMF: Oil prices to double by 2022

Oil prices could double over the next decade with sweeping implications for the global economy, according to a report commissioned by the International Monetary Fund.

"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," the report's authors concluded.

"This is uncharted territory for the world economy, which has never experienced such prices for more than a few months."

They said that research suggested energy accounted for up to 50pc of overall gross domestic product, meaning "the implications of lower oil output growth for GDP could be very large."

Persistently high oil prices are already threatening the global economic recovery according to a director of the International Energy Agency.

Maria van der Hoeven said that although prices had eased somewhat in recent weeks, the threat of heightened political tension over Iran, limited spare production capacity, and unplanned supply outages remained.

"Prices remain very high," she told a conference in Australia. "High prices pose a real threat to the economic recovery."

Brent crude oil spiked to above $120 a barrel in the early part of 2012 but was trading yesterday at about $110 a barrel. That was the lowest since January, but still very high by historical standards.