The global oil industry has postponed a “massive” number of projects because of the drop in crude prices, raising the risk of a slump in output and a potential shortfall in supply, the United Arab Emirates Energy Minister Suhail Al Mazrouei said.

Decreased investment in oil production can crimp supply in the future, Al Mazrouei told reporters Thursday in Abu Dhabi. “This is what we are concerned about. The number of postponed projects is massive.”

Benchmark Brent crude slid from more than $115/bbl in June 2014 to less than $28 in January this year, and was trading Thursday at less than $48. The decline has forced explorers to delay projects, cancel billions of dollars of investments and eliminate thousands of jobs. Patrick Pouyanne, CEO of Total, France’s largest oil company, said last month that investment cuts in the industry are threatening to cause an oil shortage by 2020.

“We in the U.A.E. are trying not to postpone projects in a major way,” Al Mazrouei said. “All projects around the world should be equal to the amount of demand.” Oil supply and demand are moving closer to a balance, he said.

Prices tumbled after the Organization of Petroleum Exporting Countries, of which the U.A.E. is a member, adopted a policy of pumping without limits to try to squeeze higher-cost supply, including some U.S. shale output, from the market. U.S. oil production is set to decline in 2016, according to the head of the U.S. Energy Information Administration, the first drop in eight years.

Source: www.worldoil.com