The price of oil is expected to rise 20 percent above its 1981 peak by the mid-1990s, with the Organization of Petroleum Exporting Countries' cartel continuing to be the main supplier to consuming nations, according to the World Bank.
In its sixth annual World Development Report, released today, the bank said that lower oil prices in the past two years had been a major factor in world recovery from recession. But it predicts that rising economic activity in rich and poor nations will result in greater oil use, rising prices and a resumption of a strong OPEC influence on the world pricing structure for petroleum.
A major thrust of the report is that after three years of deep recession that stunted economic growth in the Third World, poor countries can be expected to do better in the next couple of years, and then regain a momentum by the middle of the next decade just short of the pace of 1960s.
World Bank Vice President for Economics and Research Anne O. Krueger said that the forecast for higher oil prices was based on "the inexorable growth of demand." The report argues that despite conservation efforts the "long-term dependence" of industrial countries on imported oil will not diminish substantially.
But other energy experts have predicted that OPEC's share of the world market will be reduced further, and that continuing conservation and efficiency standards, particularly in industry, will keep oil prices from rising.
The 20 percent increase by 1995 projected by the report reflects an average after-inflation price increase of 1.6 percent a year between 1982 and 1995.
The report adds that the OPEC countries will remain the main exporters of petroleum because both American and North Sea production is expected to decline.
The report does not mention potential oil production in other parts of the world. In response to a question, Kreuger said that the report's price forecast did not take into account the potential impact of supply increases if the Iran-Iraq war is concluded.
She said that not all of the conservation results stimulated by earlier OPEC price increases have yet come "on stream," but suggested that there will be enough increased demand to offset such influences and pull prices up.
In its forecast for Third World nations, the report cautioned that improved economic growth will depend on the rich nations' willingness to cut protectionist devices, and on the poor nations' ability to increase their productivity.
The report also warned that any economic improvement among the poor nations can be undercut "if corruption is rife," and suggests that conditions in the developing countries "may be peculiarly conducive to corruption."
The projection for a better economic performance is predicated on a "central case" scenario for a rise of 3.7 percent annually in the gross domestic product of the industrial nations from 1985 to 1995. Given that result, the report says that middle-income developing countries (income over $410 per capita) could achieve a 5.7 percent growth rate in the same period.
Low-income developing countries (under $410 per capita) could achieve growth rates from 3.3 percent in Africa to 4.9 percent in Asia. The worst problems will continue to plague sub-Saharan Africa, according to the report. For all low-income developing countries, the growth rate would average 5.5 percent, compared with the 6 percent level for 1960-73.
For the next few years, the outlook shows a substantial improvement when measured against the grim results of 1980 through 1982, when all low-income developing countries showed a growth rate of only 1.9 percent, and industrial countries were even worse off at a 0.4 percent average growth. But for 1982-85, the bank's "central case" scenario shows the richer nations growing at a 3.7 percent rate, and the low-income developing countries at 4.4 percent.
The 3.7 percent rate of growth in the richer nations would be modest compared with other recovery cycles, the report notes, but "nonetheless, it would enable the waste and social costs represented by 30 million now unemployed to be substantially reduced."
A "high case"--dependent on the solution of structural problems in both rich and poor nations, and on the maintenance of a free flow of trade--could boost growth in the industrial nations to 5 percent, and to 6.2 percent for 1985-95, the report said.