The oil and gas industry needs to ramp up investments to be able to replace the equivalent of “one North Sea each year” and meet the world’s energy needs, Toril Bosoni, senior analyst with the International Energy Agency (IEA), said during a plenary session at the Rio Oil & Gas conference on Monday.

According to the IEA’s research, there has been only a “marginal uptick in investments” in 2018, as producers spend more on short-cycle supply, especially US.

Bosoni warned that companies need to continue their investments to be able to meet growing demand coming from Asia, particularly from China and India.

“What we are seeing is that the industry, every year, is losing about 3 million barrels per day of supply. Its important that you continue to invest. In the current market, the oil industry needs to replace one North Sea each year,” she said.

The reason behind the need to ramp up is because the market has tightened “significantly” in the last few years, as supply has been cut back, intentionally or not, while demand has increased.

The oil price has increased in this period, as in early 2017, Opec joined 10 non-Opec countries to cut back supply by 1.7 million barrels per day, with record high compliance – helped by unintended declines in Venezuela , Mexico, Libya and elsewhere.

According to Bosoni, supply from Venezuela is expected to fall even further, while supply from Iran could also decline amid fresh US sanctions that are expected to come into effect.

“Crude oil production has dropped 750, 000 bpd in the past year, and could fall below 1 million bpd by end 2018. In addition, by August, shipments from Iran were lower by 500,000 bpd than in May’s high, at 1.9 million bpd. During the last international sanctions, exports from Iran fell to 1.1 million bpd,” she said.

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Investments needed to meet growing demand: IEA