"Oil is the world's most vital source of energy and will remain so for many years to come," the agency said in a report.

"The immediate risk to supply is not one of a lack of global resources, but rather a lack of investment where it is needed."

The agency said in its World Energy Outlook 2008 that its benchmark estimates showed that world primary energy demand would grow by 1.6 percent a year from 2006 to 2030, or an overall increase of 45 percent.

China and India account for just over half of the increase.

Middle East demand would account for 11 percent of the increase, and non-OECD countries 87 percent, taking their share of total world demand from 51 percent to 62 percent.

"Massive investment in energy infrastructure will be needed."

The IEA estimated the need for "cumulative investment of over 26 trillion dollars (in 2007 dollars) in 2007-2030, over 4.0 trillion dollars more" than estimated in the report last year.

The power sector accounts for 13.6 trillion dollars, or 52 percent of the total. Most of the rest goes to oil and gas, mainly for exploration and development and mostly in noon-OECD regions.

Production costs continued to surge last year. "The increase outweighs the slower projected expansion of the world energy system.

"The current financial crisis is not expected to affect long-term investment, but could lead to delays in bringing current projects to completion."

Just over half of projected investment is merely to maintain supply capacity, and much of that capacity will have to be replaced.

Most of the increase in oil and gas supply will come from OPEC "if they invest enough".

The IEA estimated in an executive summary of its report that global oil supply would rise from 84 million barrels per day in 2007 to 106 mbd in 2030.

The OPEC share of global output would rise from 44 percent in 2007 to 51 percent in 2030.

Members of the Organization of Petroleum Exporting Coutries could increase output faster, but investment seemed contrained by factors, "including conservative depletion policies and geopolitics".

Saudi Arabia would remain top producer, producing 15.6 mbd in 2030 from 10.2 mbd last year.

Non OPEC outpout had reached a peak and would begin to decline by the middle of the next decade, the IEA said.

Forty-six percent of the increase in natural gas production would come from the Middle East which would triple output to one trillion cubic metres by 2030. About 60 percent would be used by local power stations.

Most of the rest of the increase would come from Africa and Russia.

If investment in gas faltered, there would be greater use of coal and therefore of carbon emissions.

"Profound" shifts in demand and supply "call for huge increases in spending on new capital stock, especially in power plants and in more energy-efficient equipment."

However, "there is enough oil in the world to feed the expected rise in production beyond 2030",the IEA reassured. "The world is not running short of oil or gas just yeat."

"Estimates of remaining proven reserves of oil and NGLs (natural gas) range from about 1.2 to 1.3 trillion barrels. They have almost doubled since 1980. This is enough to supply the world for over 40 years at current rates of cunsumption."

But the amount of oil discovered rises each year because of increased activity and improved technology.

But there was great uncertainty about the rate at which production would fall from fields as they matured, the agency said.

Benchmark estimates "imply a need for cumulative investment in the upstream oil and gas sector of around 8.4 trillion dololars (in 20007 dollars) over 2007-2030, or 350 billion dollars per year on average.

"That is significantly less than is currently being spent. This is due to a major shift in where that investment is needed. Much more capital needs to go to the resource-rich regions, notably the Middle East where unit costs are lowest."

Opportunities for international oil companies to invest in non-OPEC regions would diminish, meaning countries with oil would have to carry a bigger investment effort.

National companies were "playing an increasingly dominant role" and would account for 80 percent of increased production from 2007 to 2030.

"The international oil companies ...are increasingly being squeezed by the growing power of the national companies and by dwindling reserves and production in accessible mature basins outside OPEC countries."

The agency is is the energy monitoring and policy branch of the 30 rich nations in the Organisation for Economic Cooperation and Development.

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