Climate activists such as Extinction Rebellion have ushered in an era of permanently expensive petrol by forcing oil companies to slash their growth plans, according to Morgan Stanley.
Big businesses are set to invest almost exclusively in managing and running down their existing oil fields rather than opening new wells because their major shareholders have been spooked by waves of protests, said Martijn Rats, an analyst at the investment bank.
He said growing pressure to decarbonise, combined with a fear that peak demand is only around 15 years away, means that companies no longer want to increase supply despite relatively high crude prices of more than $70 per barrel.
As a result, prices are likely to stay high, keeping pressure on consumers, including drivers.
British petrol prices are at an eight-year high of an average 134.8p per litre, with diesel at 137.2p.
Similarly, gas prices are rising steeply, with the same concerns over the climate holding back investment in production. Energy prices surged to record highs in Britain and across Europe last week because of a severe squeeze on gas supplies.
Mr Rats said: “This year, the shareholder pressure on oil companies not to increase investment in oil projects is so strong companies are on the whole not increasing investment. There is almost no recovery in capital investment this year.”
Read more: Extinction Rebellion protests ‘have made petrol more expensive forever’