A London energy research group said on 25 October 2004 that the oil industry is in the grip of a structural crisis comparable in scale to the supply shocks of the 1970s, driven by capacity shortfalls throughout the supply chain.
The Centre for Global Energy Studies (CGES) said in its monthly report that OPEC would need to expand production capacity, and global demand growth would need to slow, for prices to ease. Three decades of constrained OPEC expansion had left the market chronically undersupplied, it said.
Crude oil prices approached $56 a barrel in New York that day, partly on fears that a labor strike in Norway, the world's third-largest oil exporter, could disrupt supply. Light sweet crude for December delivery set a record of $55.67 before easing to around $54.72.
Prices had climbed roughly two-thirds since January 2004, though inflation-adjusted levels remained well below the peak that followed the 1979 Iranian revolution, when crude equated to more than $80 in 2004 dollars.
CGES said the global economy, while less oil-intensive than in the 1970s, "is not immune to high oil prices," and described current demand growth as unsustainable at prevailing price levels.
Historical summary. TurkishPress restated this AFP wire report, first published in October 2004, in its own words.