There may be a sharp spike in oil prices next year if companies continue to shelve exploration and production projects, the International Energy Agency (IEA) has warned.

According to the group, the recent supply constrictions enacted by the Organization of the Petroleum Exporting Countries (Opec) may have an inflationary effect on oil prices once demand picks up.

Nobuo Tanaka, the IEA's executive director, told reporters at an energy conference in London that the world is in danger of being exposed to a "supply crunch" in 2010 and beyond.

Opec has cut production by four million barrels of oil per day since the onset of the financial crisis and is currently mulling plans to reduce production further at its next meeting in Vienna, to be held in March.

"When the economy starts growing, recovery comes again in 2010 and then onward, we may have another serious supply crunch if capital investment is not coming," warned Tanaka.


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