The U.S. and other economies may soon face vicious energy price spikes if governments pursue policy barriers to oil, coal and natural gas investment, the former chief executive of the world's largest oil company warned Thursday.

Policies such as increased taxes, dwindling resource access and penalties for emitting greenhouse gases - all actions President Barack Obama has prioritized - could spell a commodity market meltdown such as seen last year, cautioned Abdallah Jum'ah, who retired as CEO of Saudi Aramco late last year.

"The current market situation and an unattractive investment environment could mean potential supply demand imbalances down the road, and with them, another cycle of vicious petroleum price spikes," Jum'ah told a U.S. Export-Import Bank conference here.

Although world demand has plummeted following the global financial crisis and is expected to fall more than 2 million barrels a day on average this year, the former Aramco CEO said, demand growth will speedily return when national and regional economies - particularly powerhouses such as the U.S. and Europe - recover.

While developed countries may increase energy efficiency to smooth the demand curve, the biggest growth in consumption will again come from such developing countries as China and India, whose combined populations represent over a third of the world's inhabitants.

And though Obama and European Union leaders are trying to cultivate renewable energy sources such as wind and solar power, "pragmatically, and realistically speaking, for the next several decades, alternatives will supplement conventional fossil fuels and not supplant them," Jum'ah said.

The International Energy Agency, for example, predicts that by 2030, total world primary energy demand will rise by nearly 45% over today's levels, despite improvements in alternative energy sources, and fossil fuels will still satisfy roughly 85% of the planet's expanded energy needs. The IEA has also warned of a supply crunch, possibly as soon as next year, with lack of investment spurring the possibility of price spikes.

Last year, oil prices hit nearly $150 a barrel, adding pressure to a spiraling global economy and squeezing many companies heavily reliant on oil - such as freight and airlines - to near-demise.

Sharply tacking away from the Bush administration, Obama has delayed opening up new oil and gas drilling in areas that oil companies say offer the most promise, and administration officials have said they want to restructure the royalty program and cut tax breaks designed to encourage investment.

"We must all play a part in creating an environment conducive to such expenditures, rather than erecting unnecessary barriers which discourage development," the former CEO said.

The current administration has also made cutting greenhouse gas emissions - which will burden emitting industries such as the oil and refining sectors - a top priority.

Putting a cost on emitting greenhouse gases will have a decisive impact on fossil fuel development and have "enormous repercussions for energy security and the global economy," Jum'ah said.

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