Bosses fear 'oil crunch' within a decade

(EPA)

Delays to deep water oil production in the wake of the devastating Gulf of Mexico spill could reduce global capacity by one million barrels of oil per day, inflating fuel prices and hitting the economy, British company bosses will warn today.

An average delay of six months could reduce spare capacity by 2015 to 2 million barrels a day from 3 million. The findings are published in a report by the Industry Taskforce on Peak Oil & Energy Security, whose membership roster includes the likes of the transport company Stagecoach, the utility Scottish & Southern Energy, the retail specialist Kingfisher and Sir Richard Branson's Virgin Group.

"This year's Gulf of Mexico disaster has increased the changes of an 'oil crunch' in the coming decade," said Sir Richard. "This will lead to much higher sustained prices which will in many ways rival the impact of the credit crunch of 2007 on UK growth, jobs and stability."

The report says that while the loss of output caused by the explosion at BP's Macondo well in the Gulf was "of little significance, particularly given the uncertainties around the figures", the real impact might be in form of project delays triggered by "new legislation, tighter controls or more inspections of deep-water installations".