North Sea industry may find that it is ill-equipped to capitalise on rising oil prices following two years of stripping out costs.
Andrew Reid, managing director of energy consultancy Douglas Westwood, said markets were becoming more balanced, partly thanks to the output reductions agreed by Opec nations and Russia.
But Mr Reid said many parts of the industry had been ravaged and that companies would still have to “hang on in there”.
Speaking at Subsea Expo 2017, he said: “Markets are recovering. They’re becoming more balanced and, arguably, precariously balanced. It’s not going to take much to create a bit of a shock on the supply side and all of a sudden we’re in a state of disequilibrium.
“In the event of that happening we will start to see commodity prices spike.
“The big concern is that if we do have a situation where exploration and production companies are hugely cash flow generative and are looking to put capital to work to bring new production online, how on earth are we going to do that?
“We’ve decimated this industry within the E&P and oil services communities.”
Mr Reid said companies had lost a lot of people and managerial skill, potentially reducing the industry’s ability to put capital to work and bring new production onstream.
He added: “In my view it’s about hanging on in there. The market will come back.
“While it’s hard to specify the exact timing, something will occur that will put us in a more buoyant environment.”