World faces oil supply crisis: Iran

The world would face a looming oil supply crisis because of drop in the production, Iran's OPEC governor has warned, adding that crude is still undervalued and set to hit $100 in the short term.

"The world faces great uncertainties in security of energy supply and that the price of crude is still undervalued and set to hit $100 in the short term," Mohammad-Ali Khatibi is quoted to have said.

"The world is concerned about the security of energy supply due to the anticipation of a drop in global oil production and a drop in the supply from non-OPEC countries," Tehran Times is quoted to have said adding that the era of cheap oil was over.

According to him, current oil prices were unrealistic when compared with historic prices and a higher oil price was needed to guarantee investment in new capacity, "which is one of the solutions for supply security."

Khatibi said the increase in the oil price still did not reflect the fall in value of the dollar over recent months.

"At the moment, global oil prices have not increased in a real way compared to previous years. They do not consider the drop of the dollar in the calculations."

He made the remarks ahead of a meeting of OPEC oil ministers on December 11 in Ecuador. Several member states have said there is unlikely to be a change in production quotas at the meeting.

"In recent years some of non-OPEC countries have continuously oversupplied the market, but this will not be possible in the coming years because of a drop in production," Khatibi said.