How does a 75 per cent increase in oil prices over the next four years sound?

That is the International Monetary Fund's estimate of how much of a price rise it would take to close the gap between rising global demand for crude and slowing growth on the supply side.

To be fair, the 75 per cent figure assumes no supply response to higher prices, that is, no increase in production over and above what is already, so to speak, in the pipeline.

The assumption is unrealistic, the IMF acknowledges in its reflections on oil scarcity in the World Economic Outlook it released this week.

Opec insists its members, mainly Saudi Arabia, have several million barrels a day of spare capacity - more than required to compensate for the loss of Libyan production.

But the IMF's central point is we are in an era of increased oil scarcity, even if the tension between moderate supply growth and continued high global economic growth ends up being resolved through smaller and more gradual price increases, accompanied by moderation in demand.

The world derives a third of its primary energy from oil.

The increased scarcity the IMF is talking about is structural, not the result of one-off geopolitical events - though anyone old enough to remember the oil shocks of the 1970s and their aftermath will know the latter can do a lot of damage.

"The increased scarcity arises from continuing tension between rapid growth in oil demand in emerging market economies and the downshift in oil supply trend growth."

If the tension increases - whether from stronger demand, disruptions to traditional supplies or setbacks to growth in capacity - then market clearing could deliver price spikes as in 2007 and 2008 when the oil price climbed to nearly US$150 a barrel, it says.

The IMF forecasts world GDP growth to be about 4.5 per cent a year over the next four years, propelled by the emerging economies led by China.

While per capita oil consumption in the advanced economies has been broadly flat since the early 1980s, it is a different story in emerging economies.

China's share of world oil consumption climbed from 6 per cent in 2000 to 11 per cent last year. Its consumption is expected to double, from 2008 levels, by 2017 and treble by 2025.

In low and middle income economies the relationship between economic growth and energy demand is essentially one-to-one - a 1 per cent rise in per capita GDP is associated with a 1 per cent increase in per capita energy consumption.

So the IMF reckons the 4.5 per cent economic growth rate it forecasts implies growth in global oil demand of around 3 per cent a year.

But it expects the supply side to grow at only about half that rate.

It is striking that global oil production broadly stagnated during the economic boom of the mid-2000s, in contrast to the steady upwards trend over the previous 20 years.

The IMF attributes this to the number of oil fields reaching maturity - the stage where production plateaus or declines - in producing countries. It says the rate at which production from existing fields is declining is 4 to 4.5 per cent a year.

That has to be replaced, as well as meeting the increase in demand.

The key question is whether the decline in production from maturing fields can be more than offset by production from new discoveries, from known but undeveloped fields and from squeezing more out of those producing.

"Realising such an offset will require continued large-scale investment, which the experience of the past five years has shown to be a formidable challenge," it says.

The problem is not unwillingness to invest but rather the long time lags involved. Some new projects started over the past few years will not increase capacity for another five to 10 years.

Another issue is that in much of the world upstream investment is the exclusive preserve of national oil companies, some of which are their governments' main source of revenue and so face competing claims on their revenues.

The IMF concludes we are unlikely to see a return to the trend growth of 1.8 per cent per annum in global oil production which prevailed between 1981 and 2005.

Even with most of Opec's claimed 6 million barrels a day of current spare capacity being taken up, it only sees an average increase in global oil production of 1.5 per cent per annum at best over the next four years.

Looking further out there are technological advances which could change the supply/demand picture - but only up to a point, and not quickly.

One is a new source of hydrocarbons in the form of gas from shale deposits.

But gas is only a partial substitute for oil. Compressed natural gas as a transport fuel was not a success when New Zealand, albeit half-heartedly, tried it.

You can, at considerable capital cost and carbon emissions, convert it into liquid fuels, as they used to at Motunui, but only if you are willing to waste half of it turning the other half into a more convenient form.

On the demand side electric vehicles hold promise. But even if or when the technology is commercial it will take years to tool up to mass produce such vehicles and many more years to turn over the global car fleet of around 600 million vehicles.

Cars only account for about half the demand for transport fuels in any case. The rest is required to move big heavy objects such as ships, aircraft and trucks around.

A plug-in family car is one thing; a plug-in bulldozer is a more distant prospect.

And in any case a lot of oil is required for non-transport uses such as petrochemical feedstocks.

All of which suggests the oil scarcity the IMF is fretting about will not dissipate any time soon.