The world’s leading oil companies are struggling to contain spiralling industry costs which are compounding the upward pressure on global oil prices, according to a leading industry research group.

A report published today from Cambridge Energy Research Associates (CERA) and seen exclusively by The Times shows that the cost of a range of equipment, from drilling rigs and platforms to the construction of refineries and petrochemical plants, has risen by 6 per cent in the past six months alone and in many cases has doubled since 2005.

The sharp increases are forcing oil companies to delay major new projects, which in turn is having a significant impact on global oil production.

“Rising costs have become one of the new fundamentals driving the price of oil,” said Daniel Yergin, chairman of CERA and a leading industry authority.

“These costs are a serious concern and a major challenge for oil and gas companies and are contributing to the delays and postponements of many projects,” warned Pritesh Patel, CERA director.

The fastest increases of all were for specialist deepwater equipment for pumping oil from fields deep beneath the seabed.

Rising labour costs because of a global shortage of skilled personnel was also a major factor.

CERA noted that the rising oil price was creating a vicious circle effect by amplifying cost inflation for the industry in transportation and energy.

This in turn is forcing companies to delay projects, which restrains production and leads to constraints in supply, which forces up prices.

Mr Yergin noted that costs have been rising steadily since 2003 driven by booming global demand for oil, high-energy prices and the weak US dollar.

Raw materials for steel, such as iron ore, have risen 65 per cent this year already.

CERA said its Upstream Capital Costs Index, which measures costs in the exploration and production sector, has risen to a record 210 over the past six months from a previous high of 198. The index shows that a piece of equipment that cost $100 (£51) in 2000 would cost $210 today.

CERA’s Downstream Capital Costs Index, which monitors costs of building new refineries and petrochemical plants, rose from 166 to 176 over the same period.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts