Global oil demand is "not peaking" and will grow by 7.3 million b/d through 2022, Fatih Birol, executive director of the International Energy Agency, said Monday.

During a news conference at IHS CERAWeek, Birol said that China and India represent roughly half of that growing demand, but said without a 20% increase in global upstream investment the world market will dramatically tighten before the end of the decade.

Birol said about $450 billion was spent on upstream projects worldwide in 2016, about 25% below the level needed to both meet demand growth and compensate for ongoing decline in existing oil fields.

Without "substantial" investments upstream, the market could tighten around 2020 as spare production capacity will shrink "big time," Birol told reporters.

Prices could rise sharply by 2020 "unless significant new projects are sanctioned soon," he said.

Birol said EIA projects global supply to grow by 5.6 million b/d through 2022, with the US representing about 1.6 million b/d of that growth. Brazil and Canada make up the second- and third-largest amounts of that growth, respectively.

On the US, Birol said a "second wave" of shale oil growth has begun. He said the size of this shale boom, however, depends on where prices go.

IEA on Monday released its five-year outlook, titled "Oil 2017," in which the agency said global supply may struggle to keep pace with demand after 2020.

--Brian Scheid, brian.scheid@spglobal.com

--Edited by Jason Lindquist, jason.lindquist@spglobal.com

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