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A report issued by think-tank Chatham House said governments and companies have failed to invest enough in expanding production to prevent a jump in prices, the British Broadcasting Corp. reported Friday.

Oil prices peaked above $145 per barrel in early July, but have fallen since to around $120 per barrel.

Future price jumps could be avoided only by "a major recession (that) reduces demand - and even then such an outcome may only postpone the problem", said Paul Stevens, author of the report called, "The Coming Oil Supply Crunch."

The report says the Organization of Petroleum Exporting Countries has fallen short on expansion goals since 2005 and that oil companies favor returning profits to shareholders over investing in future production, the BBS reported.

Stevens also said a "resurgence of resource nationalism" discourages new production by limiting options for international firms.

"While the forecast is controversial and extremely bullish, even allowing for some increase in capacity over the next few years, a supply crunch appears likely around 2013", Stevens said.

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