Compared with last year’s report, the agency has cut its baseline oil demand expectation over the next 25 years by 6% to 115.4 million barrels per day.

Likewise, natural gas consumption over the same period has been revised down 2% to 4789 billion cubic metres per day – a yearly growth of 2.1% compared with its previous 2.3% estimate.

Between 2003 and 2030, the report said demand for oil would increase 46%, while gas consumption would soar 77% - taking over coal as the world’s second largest energy source.

The agency also said new energy sources would be increasingly needed to meet demand in emerging economies, such as China and India.

The report claimed there were sufficient oil and natural gas reserves to meet the growing needs, especially in the Middle East and North Africa.

But it warned the energy sector needed to urgently spend about A$27 trillion in new investments, such as distillation and refining capacity, to bring those supplies to the market. About half of this investment was required in developing countries, it said.

Futhermore, the agency added that failure to spend enough over the next 25 years could add another US$13 a barrel on the projected price of oil.

Greenhouse gas emissions were also forecast to rise 50% in the next quarter-of-a-century, if current consumption levels remained unchecked, claimed the agency.

"These projected trends have important implications and lead to a future that is not sustainable from an energy-security or environmental perspective,” IEA executive director Claude Mandil said.

“We must change these outcomes and get the planet onto a sustainable energy path."

Established during the oil crisis of 1973-1974, the IEA is a leading energy policy adviser for its 26 member countries, including Australia, New Zealand, the US, Canada and 19 European nations.