This stronger demand has not yet been met by compensating growth in the supply of crude oil - although a recent agreement by OPEC to boost production will help. Nor have we seen substantial efforts by price-  2  BIS Review 39/2004  sensitive consumers to use less oil and gas.
Meanwhile, geopolitical events have contributed to concerns about potential supply disruptions, exacerbating the run-up in oil prices. It is reasonable to expect that oil prices will remain relatively high until some of the geopolitical uncertainty dissipates, world production capacity expands, and further conservation efforts take hold. Higher energy costs mean that it will be more expensive to produce many goods and some services.