Mohamed El-Erian is chief economic advisor of Allianz. He also chairs Gramercy Fund Management.

Both international benchmark Brent crudeAnd U.S. crudeIn recent weeks, prices rose above $80 because of increased demand after the pandemic. Natural gas prices are also on the rise, causing crises all over the globe, including Europe.

CNBC’s Dan Murphy spoke to the ADIPECEl-Erian stated that he agrees with Sultan Ahmed Al Jaber’s earlier comments about how global markets have “sleeped” into an energy crisis at the Abu Dhabi National Oil Company.

El-Erian stated that two scenarios had occurred which were unthinkable, if not impossible, a year ago. First, the demand for energy would rise and supplies would not catch up. Second, transition fuels will be difficult to obtain.

While he acknowledged that no market watcher had predicted oil prices of $80 per barrel at the start, he rejected suggestions that these could reach $100.

El-Erian stated that if you focused only on the supply, oil could be found at $100. This is because the industry has seen underinvestment and the demand for it will remain strong.

However, if one looks at what’s happening on the demand side you can see that there are some important questions. While demand today is very strong, will it remain so in six months? There is really big questions in terms of demand destruction — people buying less because prices are higher — and in terms of whether policy becomes contractionary or not.”

OPEC and its oil-producing allies agreedearly this month, to preserve its current output levels. In the face of rising oil prices and Washington’s call for market cooling measures, it decided to not reduce production.

Although the possibility of oil prices rising sharply again poses a threat to global economic recovery it is not the only risk. El-Erian said that this was far less serious than other risks. The most important of these being a central bank “miscalculation of inflation”.