UK’s oil addiction makes recession inevitable

A UK academic has warned that unless the country breaks free from its dependence upon oil then long term recession is ‘inevitable’.

Simon Snowden, a lecturer in Operations Management at the University of Liverpool, issued the warning in his recent address to the All-Party Parliamentary Group on Peak Oil and Gas.

Snowden argued that the world’s oil reserves are about to hit a ’supply plateau’ whereby demand for oil exceeds supply, spelling catastrophe for oil dependent economies across the globe.

The key evidence cited for his view is the increasing price of oil, which has almost tripled in the last year alone, from $50 per barrel twelve months ago to a record $139 per barrel this weekend.

Financial experts Goldman Sachs recently warned that prices in excess of $200 per barrel are looking increasingly likely within the next two years.

Demand for oil has been rising for some time, largely due to economic growth in China and India.

Increasing prices have also been exacerbated by supply problems due to political instability in countries such as Nigeria and Iraq.

According to Snowden, unless the UK completely and immediately severs itself from dependence upon oil, then the economy will cease to grow, leading to long-term recession and ever increasing prices.

Especially hard hit will be the poor and the elderly, who are the most likely to suffer from fuel poverty, and farmers, who are particularly vulnerable to fluctuations in oil prices.