The price of oil is unlikely to stay at its current record levels, the head of Shell has said.
Shell UK chairman James Smith told Sky News’ Jeff Randall Live that the rise was the result of speculation and international tensions.
Oil is now priced at a record $93 a barrel.
“It’s a little hard to explain why the oil price is as high as it is at the moment, because there’s plenty of oil and oil products around- it’s not as if there’s a shortage,” said Mr Smith.
“Some big institutions have seen oil as an investment vehicle, so they’ve come into the marketplace and the market does get frightened when there’s international tension.”
UK consumers are yet to feel the impact, as sterling performs well against the dollar.
But Sky News business editor Michael Wilson said leaders of UK firms are concerned.
“The price rise hasn’t hit them yet, but it will. Along with pensions, energy is a big worry. Unless it falls, the implications are obvious,” he said.
Speaking to Sky News, Mr Smith admitted that easily extracted oil was on the decline, but hydrocarbon resources were still very much available.
The Shell UK chief said the reliance on renewable energy options would continue to grow.
He preducted energy requirements on renewable sources would double by 2050.
Fossil fuels currently account for 80% of energy, but he said that figure would decrease to 60% by the middle of the century.
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