Oil markets globally are faced with the rising threat of a shortage emerging over the next few years due to the lack of development of new oilfields, with capital spending at the lowest level in more than 50 years, the International Energy Agency has warned. The warning came as the global price of crude oil hovers around $US45 a barrel, which is well down from the mid-2014 level of around $US115. In response, oil companies have slashed exploration and production spending. Much of the focus of attention in the oil market at present is on the shale oil market in the US which is able to respond quickly to oil price movements due to its short investment cycle. But traditional oilfields require as long as six years to bring on stream once an initial decision is made to invest, the Agency warned in its latest world energy outlook, released on Wednesday. "Two consecutive years of declining upstream oil and gas investment in 2015 and 2016 ... raise concerns about the adequacy of future supply – as do political tensions and instability in major resource-rich countries such as Iraq, Libya, Nigeria and Venezuela," the Agency said. "If new project approvals remain low for a third year in a row in 2017, then it will become increasingly unlikely that demand and supply can be matched in the early 2020's without the start of a new boom/bust cycle for the industry. "In 2015, for example, the volume of conventional crude oil resources that received development approval fell to its lowest level since the 1950s and the data available for 2016 shows no sign of a rebound." Globally, non-OPEC-member country output is expected to "go into retreat from the early 2020s" which could result in OPEC's share of global oil production rising towards 50 per cent by 2040, with a growing share dependent on both Iran and Iraq. Longer term, demand for oil from the transport sector will be replaced in part by electricity thanks to a rise in demand for electric cars, the report noted, although the freight, aviation and petrochemicals sectors will all continue to rely on oil. The organisation forecasts the number of electric vehicles to reach 30 million by 2025, and exceeding 150 million by 2040. This compares with the 2015 level of just 1.3 million. But demand growth will continue to rely on supportive government policy such as tighter fuel-economy and emission controls along with financial incentives, it noted. Globally, the coal market is restructuring with supply cuts in China and the US coupled with expected declining demand in Europe and the US but with India and south-east Asia to record rising coal use. "China is instrumental to the way the coal market finds a new equilibrium," the report noted, "after the abrupt end to the coal boom of the 2000s." "The de-globalisation of the steam coal market hits exporters across the board, but those with low production costs and proximity to key importers in developing Asia, are slightly better off than exporters that have large market shares in the Atlantic basin." The report highlights how China passed "peak coal" in 2013 and, along with India, is accelerating the global transformation from coal to alternative energy sources, Tim Buckley of the Institute of Energy Economics and Financial Analysis said. "The lesson for governments and investors is simple: those who exit fossil fuels and embrace solar and wind will reap financial rewards and avoid stranded assets." The report came as Wesfarmers confirmed it was hoping to sell its coal assets, a 40 per cent stake in the Bengalla mine and 100 per cent of Curragh – both steaming coal mines which despite recent losses are benefiting from the surge in export prices.