The oil industry only found 2.4 billion barrels of oil last year, the smallest annual figure ever recorded, the International Energy Agency said Thursday.
The Paris-based group, which advises oil-importing countries, said last year’s small number of oil discoveries compares to an average 9 billion barrels discovered each year between 2000 and 2015.
Energy companies also sanctioned the smallest number of conventional oil projects in more than seven decades, approving just 4.7 billion barrels for development, nearly a third lower than the previous year.
Meanwhile, the IEA expects global oil demand to increase 1.2 million barrels a day each year over the next half decade, which the group believes could eventually flip the oil market on its head, with demand rising above supply in a few years.
The IEA has argued even the U.S. shale industry, which is expected to balloon domestic production up to about 10 million barrels a day by the end of next year, can’t fill the looming supply gap.
“Every new piece of evidence points to a two-speed oil market, with new activity at a historic low on the conventional side contrasted by remarkable growth in U.S. shale production,” IEA executive director Fatih Birol said in a written statement.
“The key question,” he said, “is how long can a surge in U.S. shale supplies make up for the slow pace of growth elsewhere in the oil sector.”
Offshore projects made up only 13 percent of all the new ventures approved by oil companies last year, down from an average 40 percent over the previous decade and a half, the IEA said.