25th March 2011
Chief economist Keith Wade says that while prices have risen by 60 per cent since July 2010, this pales in comparison with the 2007/2008 increase which saw prices rise 92 per cent and hit $150 a barrel.
Currently the price of oil is hovering around $115 but the fund manager believes that only around £20 to £25 can be attributed to the crisis in the Middle East and North Africa.
Shocks from the 1970s and 1990s saw the price of oil treble and double respectively.
Wade adds: "More importantly, this shock is not purely about supply problems, but strong demand from Asia and the US has also played a role. Demand shocks tend to have less overall effect on the world economy than supply shocks."