Azerbaijan, Baku, Feb. 22 / Trend /
Oil prices are entering a "dangerous zone" that threatens global economic growth, Bloomberg reported according to Fatih Birol, chief economist at the International Energy Agency (IEA).
"The high price is definitely not good news for anybody. We may see higher prices if the turmoil in key countries in the Middle East and North Africa continues", Birol told reporters at a conference in the Indonesian capital Jakarta today.
Oil jumped to the highest in more than two years as violence intensified in Libya, raising concern crude supplies will be disrupted as unrest escalates around the region.
New York futures for April delivery rose as much as 9.8 percent from the close on Feb. 18, while London-traded Brent surged to the highest since September 2008, as soldiers deserted Libyan leader Muammar Qaddafi's government and diplomats resigned.
According to Birol, conditions in the Middle East and North Africa are "very important from the point of view of oil supply and demand, not only for the next few weeks, but looking from a longer perspective. The IEA estimates that "in the next 10 years, 90 percent of the growth in global oil production needs to come from Middle East and North African countries.
The increase in oil prices is adding to inflationary pressures and will increase costs for oil importers such as Indonesia and Japan, Birol said.
"It's a major problem for main oil-importing countries in term of trade balances," Birol said. "If prices are $100 a barrel on average, our estimates for Indonesia is, the oil- import bill of Indonesia will increase significantly."
IEA estimated that about 2.7 percent of Indonesia's gross domestic product this year would go toward covering the oil import bill, Birol said.
"For Japan, 3 percent of GDP would go to pay the import bill, which is not good news," Birol said.