What happens when U.S. oil consumers are forced to pay $7 a gallon? Ask them over the next five years.

If you thought T. Boone Pickens’ $125 oil prediction was a shock, CIBC World Markets’ chief economist Jeff Rubin is predicting $200 oil in the next five years.

Oil production, says Rubin, will “barely grow over the next five years, edging up barely more than 1-million barrels a day over the next three years, and only half a million barrels a day between 2010 and 2012.” And those increases could fall short of demand, leading to $150 barrel oil by 2010, and $200 a barrel by 2012.

Imagine what you’ll be paying at the pump when that happens. I know I’ll be taking a bike to work.

And it isn’t so far-fetched given higher demand form developing countries like India. “However, surging prices would cause demand to ease in the United States, with gasoline prices, already averaging US$3.60 a gallon, climbing to well over US$4 a gallon this summer and as much as US$7 a gallon by 2012,” he said.

Sure, the forecast goes against conventional thinking that slower global and U.S. economic growth will drag oil below $100, but anything’s possible these days. Who’d have thought we would have seen $119 oil back in 2000?