The Organisation of Petroleum Exporting Countries (Opec), the oil cartel, will be unable to meet western countries' demand projections in 10 to 15 years, Saudi energy officials have warned US and European governments.
At today's prices, the world will need Opec to boost its production from 30 million barrels a day to 50 million barrels a day by 2020 to meet rising demand, according to predictions from the International Energy Agency, the energy watchdog for consuming countries.
But Opec would have an "extremely difficult time" meeting that level of demand, senior Saudi energy officials have privately warned their US and European counterparts.
By Saudi Arabia's calculations, there is a gap of 4.5 million barrels of oil a day between what the world needs from the kingdom and what Saudi officials think they can provide.
US oil futures yesterday rose above $60 (€50.33 )a barrel as tropical storms caused production shut-downs in the Gulf of Mexico. This led to fears that the storms would hit refinery output in the south of the US.
The market is worried that refiners will not be able to bolster pre-winter supplies as usual.
In London, August-dated Brent futures contracts were up $1.16 at $60.75.
G8 leaders are expected to discuss the impact of high oil prices on economic growth during their three day summit at Gleneagles, Scotland, which began yesterday.
During a stopover in Denmark en route to the summit, George Bush, US president, urged leaders to spearhead a worldwide effort to invest in alternatives to oil and gas.
Mr Bush said: "The United States, for national security reasons and economic security, needs to diversify away from fossil fuels. And so we've put out a strategy to do just that."
Saudi Arabia has the world's biggest oil reserves and will need to shoulder as much as half of Opec's production growth in the next 10 to 20 years, with the rest mainly coming from Kuwait and the United Arab Emirates.
Saudi Arabia currently pumps 9.5 million barrels a day and has assured consumer countries that it would be able to reach a production capacity of 12.5 million barrels a day in 2009 and probably 15 million barrels a day eventually, which it could sustain for half a century, a senior western energy official said.
"But they said it would be extremely difficult to move above that figure," he added.
European officials are optimistic that energy-saving measures could curb oil demand.
Based on conversations with Saudi delegates, they believe Opec would be able to produce the 44 million barrels a day the world would need if oil consumers adopted efficiency measures under discussion by governments in the US, Europe and some developing countries.
These measures include: implementing minimum car efficiency standards, switching to some use of biofuels and providing incentives for the use of public transport, especially in the developing world.
