A new report from the International Energy Agency (IEA) is sounding the alarm about low investment in new oil developments.
The IEA report shows investments in new projects slumped in 2015 and 2016 amid low prices.
The Paris-based agency noted projected spending in 2017 is worrisome. While global markets remain oversupplied for now, the report states that with demand for oil rising, supplies could dwindle.
The report also states global oil consumption is expected to hit 100 million barrels per day by 2019, reaching about 104 million barrels per day by 2022.
All of the new demand is expected to come from developing countries, with seven out of 10 new barrels being consumed by nations in Asia. India is expected to consume more oil than China by the early 2020’s.
The report projects that shale producers in the U.S. will likely be the biggest source of new supply, but noted Canada and Brazil are also expected to ramp up production.
In some good news for the Canadian oil patch, the report’s authors noted Asia will likely have to look beyond the Middle East to meet its oil needs, as those countries focus more on their domestic markets.
The report also forecasted Canada and Brazil will export more crude to Asia than the Middle East does within the next few years.