The International Energy Agency (IEA) is warning consumers not to let cheap oil lull them into a false sense of security amid forecasts of a price spike by 2021.

In a report, the IEA said it expects prices to start recovering in 2017.

But it forecasts that will be followed by a sharp jump in price as supply shrinks following under-investment by struggling producers.

Brent crude touched a 13-year low of $28.88 a barrel in January.

It has since recovered somewhat, but is still far below a high of $115 in June 2014.

On Monday the price was up around 4.9% at $34.62.

Fatih Birol, executive director of the IEA, said: “It is easy for consumers to be lulled into complacency by ample stocks and low prices today, but they should heed the writing on the wall: the historic investment cuts we are seeing raise the odds of unpleasant oil-security surprises in the not-too-distant-future.”

‘Enormous stocks’

The policy advisor expects global oil supply will grow by 4.1 million barrels of oil per day between 2015 and 2021, down from an increase of 11 million barrels of oil per day between 2009 and 2015.

It also expects investment in oil exploration and production to fall by 17% in 2016 following a 24% decline last year.

The IEA said: “Only in 2017 will we finally see oil supply and demand aligned but the enormous stocks being accumulated will act as a dampener on the pace of recovery in oil prices when the market, having balanced, then starts to draw down those stocks.”

Global markets have been awash with oil following the boom in shale energy production in the US. That has spurred the Opec oil producing nations, led by Saudi Arabia, to leave oil output unchanged to drive the price of crude down and put pressure on its American competitors.

An economic slowdown in China has also adversely impacted demand for oil.