BRUSSELS, Belgium (AP) -- BP PLC's chairman said Wednesday that oil companies never expected demand for oil to surge so fast and, as a result, failed to make the investments needed to clear the current supply bottleneck.
Oil prices have quadrupled in the last seven years, hitting a record high on May 22 when traders paid US$135.09 a barrel.
Peter Sutherland, chairman of the oil giant's board, said recent high prices were not driven by market speculators or fears that oil is running out.
''We just didn't predict how fast demand would take off,'' he said at an event in Brussels organized by the European Policy Centre think tank.
''The high price that we have today is caused, in my view, by the inability of the industry to easily supply rising demand and this isn't because of the lack of available resources but because of inadequate investment in both production and complex refining capacity,'' he said.
Sutherland said that lack of investment happened gradually over many years ''sometimes during periods when the oil price was too low.''
He also blamed a ''feeling of imminent threat'' that supplies were limited on political instability in oil producing nations Iraq, Nigeria, Venezuela and Iran and fears that Russia and Middle Eastern nations were using energy as a political weapon.
''Sometimes it's justified and sometimes it isn't but the feeling is there and consumer countries have consequently turned inwards,'' he said.
Europe is seeking to develop more renewable energy sources as part of its thrust to cut greenhouse gas emissions and lessen its dependence on imported energy.
Sutherland said he expects existing proven oil resources to last at least another 43 to 45 years with significant finds still to be located.