Soaring demand for crude in oil-producing countries such as Saudi Arabia, Russia and Mexico is helping to propel global crude prices to record highs.

Global demand is expected to rise to 86.8 million barrels a day this year, up from 85.8 million barrels last year, according to the International Energy Agency (IEA). Although demand from OECD member countries, such as the UK and the US, fell by 0.5 per cent in 2007 and is expected to weaken again this year, this is being more than offset by surging demand from developing countries.

The growing thirst for oil in China and India is well known. However, this global surge in demand is being led by oil producers that are emerging as significant consumers, too, undermining their capacity to export when global supplies are tightening.

“Consumption is cannibalising their export capacity,” Jeff Rubin, an oil analyst for CIBC World Markets in Toronto, said. Last year the 13 members of Opec, along with the independent producers Russia and Mexico, consumed more than 12million barrels of oil a day - about 60 per cent more than China and more even than Western Europe. Taken as a bloc, these “oil economies” represent the largest oil market in the world after the US.

Oil demand in Iran, for example, has grown at 5 per cent annually for the past five years, the same rate as in China. Saudi Arabia, the world's largest producer, with more than nine million barrels a day, and the United Arab Emirates are experiencing similar rates of growth.

Mr Rubin said: “As the price of oil goes higher, it only boosts domestic consumption because there are more petrodollars to boost the economy and the local gasoline prices remain low [because of subsidies].”

He estimates that by 2012 there will be more oil consumed by developing countries than by members of the OECD. “This was unthinkable in 1990,” he said.

Indeed, energy demand in the Middle East has grown so rapidly that states such as the UAE are being forced to consider importing coal and even developing nuclear energy to drive their petrodollar-charged economies.

Taken together, Russia, Mexico and Opec account for nearly 60 per cent of global oil production - more than 47 million barrels a day. They export about 35 million barrels. Although they should be able to maintain production at present levels, exports are likely to be crimped by as much as 2.5 million barrels a day by the end of the decade. They will be crowded out by soaring domestic oil consumption, boosted by rapid economic growth and heavy fuel subsidies.

David Fyfe, an oil supply analyst for the IEA, said that although global demand was rising, a shortage of new fields and investment in both Opec and non-Opec countries meant that excess spare capacity - the ability of producers to pump more oil quickly to relieve supply constraint - was diminishing fast.

The IEA estimates that by 2012 global oil demand will have risen to 95 million barrels a day, but spare capacity will have fallen to only 1 million to 1.5 million barrels, down from 2 million barrels.

Mr Fyfe said that this represented “an extremely narrow margin of excess capacity” in a world in which volatile producer countries, such as Iraq and Nigeria, could easily suffer sudden shortfalls in production.

Times Recommends

• US stocks fall below 9,000 mark
• House price fall smallest in seven months
• Wary investors opt to keep cash in safes