Energy expenditure across the globe will likely reach all-time highs of $13 trillion in 2022, representing 13% of global gross domestic product (GDP) due to soaring energy commodity prices, according to research firm, Thunder Said Energy.

Thunder Said Energy forecasts the price of crude oil to range between $125 and $150 per barrel, while  the price of coal is expected to hit between $250 and $300 per ton and gas to reach between $40 and $45 per thousand cubic feet in 2022.

“Curtailing demand is the only short-term option to alleviate shortages. There are no good options here, only ‘less bad’ ones,” notes Rob West, the founder of Thunder Said Energy.

The increase in commodity energy prices is a result of multiple factors such as energy supply constraints, increasing energy demand and the ongoing Russia-Ukraine crisis. Meanwhile, a decrease in oil and gas production by Russia is also expected to add to the energy crisis which Europe is facing. Natural gas prices in Europe have already increased by 500% between 2021 and 2022, and due to tensions between Russia, Ukraine and western countries, global crude oil prices reached $130 per barrel in early March.

The anticipated increase in energy spending in 2022 is comparable to the 1979-1980 crisis, when oil and gas prices sparked. While spending on energy increases, global gross GDP is expected to rise from $94.9 trillion in 2021 to $102 trillion in 2022. Between 1900 and 2020, energy expenditure accounted for 4% of the global GDP.

Underinvestment in conventional energy is also having significant negative impacts on the global market, according to the research firm, considering fossil fuels are used to meet up to 83% of the world’s energy demand.