IEA says oil capacity crunch looms

The International Energy Agency fears that an expected recovery in oil demand from 2010 and oil project cancellations due to low crude prices and the credit crisis will mean no spare oil capacity at the end of 2013.

"That is our concern. Investment, investment, investment, that is what we are asking," IEA Executive Director Nabuo Tanaka said at a conference in Lisbon on Friday. "We now see many cancellations or postponements of supply investment projects...and we learned the lesson last year when we didn't invest, the market became volatile and oil prices reached $147 per barrel," he said.

He added that supply from producing oil fields will decline dramatically, and that to offset the decline by 2030 "we need 45 million barrels per day of new capacity, or the equivalent of 4 Saudi Arabias".

Read more: Upstream Online