Drastic cuts in oil industry investment risk creating a shortfall in supply that by 2020 will expose the market to a surge in prices, the International Energy Agency has warned. Despite a chorus of analysts predicting a decline in oil consumption in the coming years, as governments push for energy efficiencies, cleaner fuel usage and electric cars, the IEA cautioned in its five-year outlook: “We see no such peak in sight.” More investment in global oil and gas exploration and production is crucial to ensure future supplies are able to meet growing demand, it added. The oil price crash that sent prices from $115 in 2014 to below $30 early last year forced international energy companies to curb investment by a quarter in 2015, and by a similar amount last year. The Paris-based agency said only modest signs of recovery in 2017 meant that it was far from clear that enough projects would enter the pipeline in the next few years to avoid a supply crunch. “We see significant risk of prices rising sharply by 2022, unless a significant amount of new projects are sanctioned and sanctioned quickly,” Fatih Birol, executive director of the IEA said at the CERAWeek energy conference in Houston.

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