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Over the past decade, oil has risen from a meagre $10 per barrel to nearly $100 last year. Now, it looks likely to double to $200 within the next six to 24 months, according to Goldman Sachs.

The Newsweek cover story suggests that everyone will be hurt by the spike as world economic growth is hampered and inflation rears its ugly head.

Ironically, the inflationary pressure is particularly severe in China and India whose unrelenting demand for oil to fuel economic growth has been blamed for causing a tight global oil market.

Previously, both China and India were thanked for taming global inflation with abundant cheap manufactured goods and services. Now, both are exporting inflation to the rest of the world as their domestic price controls are gone.

While $200 oil will drive greener technologies to replace fossil fuels, it's highly unlikely that any combination of those substitution fuels will be sufficiently available over the next 24 months.

For example, ethanol production was five billion gallons last year - just the size of single oil production platform off the coast of West Africa.

Hence, the outlook is gloomy and analysts predict there will be more regional trade and investment due to the prohibitive costs of long-distance transport.

For example, the US could import more goods from Latin America and Asian economies do more trade with China and Japan.

"It's a harbinger of the reversal of globalisation," said Jeff Rubin, chief economist for CIBC World Markets. "At $200 a barrel, you'll see transport costs rise so much that they will effectively reverse the trade liberalisation of the last 30 years."

At $200 per barrel, virtually no industry will be spared. The most vulnerable are automobile companies, which are not competitive in terms of alternative energy, and airlines which do not have enough fuel-efficient aircraft.

Another significant impact is likely to be felt by the global financial system as huge amounts of petrodollars are put into sovereign wealth funds for investing in financial markets.

According to Morgan Stanley managing director Stephen Jen, the proven oil reserves of the six Gulf nations alone will be worth a combined $95 trillion at $200 per barrel - about twice the size of public equity markets.

In other words, given their scale, these sovereign wealth funds will be market king-makers.

At this stage, conservation appears to be the only saviour as we can easily reduce energy consumption by around 25 per cent by driving within the speed limit or turning off lights when not in use.