The oil industry risks a supply crunch as big energy companies focus on US shale and other short-term efforts over the long-term mega-projects seen in years past, the head of Saudi Arabia’s state energy giant said. Amin Nasser, chief executive of Saudi Aramco, said rising investment into short-cycle output, which ebbs and flows faster than conventional projects, would not be enough to meet rising crude demand. “Something like shale oil . . . it is not going to really create a major dent in total global supply requirements up until 2040,” said Mr Nasser in an interview with the Financial Times.

International energy majors are prioritizing cutting costs and returning money to investors through dividends and share buybacks after a brutal industry downturn. “It is an indication that companies are worried about meeting shareholder requirements,” said Mr. Nasser of a reluctance to invest in projects that are costly and take more time to develop but tend to last longer.

Technological advances in hydraulic fracturing have unlocked vast amounts of oil from “tight” rock formations, and ExxonMobil, Chevron, and Royal Dutch Shell are among those investing heavily in US shale fields, which generate cash quicker. But the world will still depend on conventional oil such as that from Saudi Arabia, the world’s biggest exporter. Mr Nasser’s comments come as Saudi Arabia’s willingness and preparedness for a stock market listing of Saudi Aramco is in doubt amid concerns about legal exposure and an inability to generate the $2tn valuation sought by the kingdom’s powerful crown prince, Mohammed bin Salman. “It is a sovereign decision,” Mr Nasser said, adding that Riyadh had yet to determine whether an IPO would take place.