The amount of oil discovered globally dropped to a record low in 2016, according to the International Energy Agency (IEA).
The Paris-based group said that oil discoveries fell to 2.4 billion barrels in 2016, compared to an average of 9 billion barrels over the past 15 years.
It also warned that trends were likely to continue as companies continued to cut spending and the amount of new projects being started were at a 70 year low.
With global demand expected to keep growing, and an extended period of low investment, the IEA also said that the US shale industry would be fundamental in balancing the low output of the conventional oil industry.
Fatih Birol, the IEA’s executive director, said: “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 US shale production.
“The key question for the future of the oil market is for how long can a surge in US shale supplies make up for the slow pace of growth elsewhere in the oil sector.”