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A new oil industry boom-and-bust cycle is likely if the current reduction in new investment is not reversed, says the International Energy Agency.

The IEA says unless more money is spent exploring for, and developing, new oil fields, then demand may outstrip supply in the early years of the next decade.

That could see prices surging again, says the IEA, which is an autonomous body with 29 member countries.

Investment in new oil supplies last year was at its lowest since the 1950s.

"We estimate that, if new project approvals remain low for a third year in a row in 2017, then it becomes increasingly unlikely that demand... and supply can be matched in the early 2020s without the start of a new boom/bust cycle for the industry," says the IEA's World Energy Outlook report.

Over-supply of oil has driven down crude prices in recent years.

They have fallen from their recent peak of more than $100 a barrel in 2014, to less than $30 a barrel earlier this year.

Price fall

As a result, investment in new oil fields has also fallen from $780bn in 2014, to $580bn in 2015, and then to $440bn this year.

The IEA says world-wide investment must now rise to at least $700bn a year because it takes between three and six years for a new oil field to start producing.

The Opec oil producers' cartel made a similar point last week.

"While the recent oil market environment has been one of oversupply, it is vital that the industry ensures that a lack of investments today does not lead to a shortage of supply in the future," said Opec's annual report.

The crude oil price is currently about $46 a barrel, have fallen dramatically over the last two years.