The U.S. shale boom masks threats to global oil supply including Middle East turmoil, conflict in Ukraine and the difficulty of unconventional oil production beyond North America, the International Energy Agency said.

“The global energy system is in danger of falling short of the hopes and expectations placed upon it,” the IEA said in its annual World Energy Outlook Wednesday. “The short-term picture of a well-supplied oil market should not disguise the challenges that lie ahead as reliance grows on a relatively small number of producers.”

Global oil consumption will rise to 104 million barrels a day in 2040 from 90 million barrels a day in 2013, driven by demand for transport fuel and petrochemicals in developing countries, the report said. To meet that growth and replace exhausted fields will require about $900 billion a year in investment by the 2030s as oil companies develop fields from Canada’s oil sands to the deep waters off Brazil, the IEA said.

Oil prices slumped to a four-year low this month on concern that supply from U.S. unconventional fields is rising faster than global demand. The recent price slowdown is threatening investment in the industry as companies try to insulate profits from the price fall. While the near-term picture is secure, the development of capital-intensive areas outside North America is at risk, the IEA said.

The benchmark U.S. crude futures contract closed at $77.94 Tuesday in New York, while Brent, the European benchmark, settled at $81.67 a barrel in London, its lowest close since mid-October 2010.

Oil Sands

In the Canadian oil sands, among the most expensive oil deposits in the world to exploit, a slowdown is already evident and the IEA estimates about a quarter of projects are at risk as prices fall. Likewise, the complexity and capital intensity of developing Brazil’s deepwater fields could also contribute to a shortfall in investment.

Replicating the U.S. shale oil boom outside of North America will also be a challenge, the report said. A lack of existing oil and gas infrastructure, environmental opposition to fracking, and uncertain geology are among the reasons unconventional drilling hasn’t spread.

Threats to new investment stand alongside political risks to oil and gas production. Sanctions that restrict access to Russia’s technologies and capital markets have raised concerns about security of supply from the world’s largest energy exporter, the IEA said.

Iraq is the biggest risk to the security of oil supply, the report said, contributing to the most turbulent time in the Middle East since the 1970s. The region is heavily depended upon as the only large source of low-cost oil. With Asian countries set to import two out of every three barrels of crude traded internationally by 2040, over-reliance on the region for production growth is a concern, the IEA said.

The Paris-based IEA advises industrialized nations on energy policy and produces the World Energy Outlook each year, making long-term forecasts on global oil and gas supply.