Oil prices are at an all-time low, but a new study from the Peterson Institute for International Economics (PIEE) says they are not sustainable.
It comes as the world’s economy continues to struggle with the effects of the climate crisis, and a new report from the International Monetary Fund says global economic growth will slow to 1.4% this year and 2.0% in 2018, from 3.5% in 2017.
“It is not sustainable for oil prices to remain low for the foreseeable future, which is why policymakers should begin to consider alternatives to the current approach of raising oil prices,” said David Rosenberg, the co-author of the report.
The IEA also found that the global price of oil is not a reliable measure of the world economy, which could lead to a rise in inflation, which would be bad for the economy.
A low price would not be good for China, the world largest economy, as it would not help to stimulate growth.
As the IEA’s report notes, the economic impact of a drop in oil prices is hard to measure, since the world is dependent on oil for nearly half of its total income.
China has already been experiencing a slowdown in the economic activity in the last few years, which has caused many companies to close or move production out of China, reducing its ability to export the oil to foreign markets.
Oil companies and the governments that depend on them are still struggling to keep their businesses afloat.
“Given the current economic conditions, the impact of the current oil price on the world financial system will likely be modest,” the IEE wrote.
However, the IAEA said the current policy of low oil prices, coupled with the weak global economic recovery, will eventually hurt the global economy.
The IEA said it is “not yet certain” whether the policy of reducing oil prices will lead to more economic growth.
In 2018, the IMF said global economic output will likely decline by 0.7% this season, from 2.1% in 2020.
There is also the possibility that the world will become a “new normal” for oil production, which means that the price of the product will fall, which will mean less of the value of the oil being produced will be sold to the world.
And the IEM said it’s hard to know whether this will cause a further drop in prices.
The IEE also warned that the oil industry is facing a “double whammy” of rising prices, which make it harder to recover from the impact on the price, and lower revenues.
“The economic impact is likely to be modest given the low level of output in 2018.
However, if oil prices were to decline further, the cost to producers could rise,” the report said.
Despite the IEPE’s warning, BP has insisted that its prices are high enough to attract investment.
BP said last week that it had agreed to pay $1 billion in US taxes to the US government, after the IEC said its earnings could have been $30 billion higher.
Meanwhile, ExxonMobil and Shell are still paying billions of dollars in penalties and interest to the government in the US and UK for environmental violations.
BP has also been accused of cheating on the emissions tests of its oil production in the UK.
Shares of Shell rose 4.4%, to $49.93 in New York, while Exxon fell 1.6%, to close at $59.50.