As a result, investment in new oil fields has also fallen from $780bn in 2014, to $580bn in 2015, and then to $440bn this year.
The IEA says world-wide investment must now rise to at least $700bn a year because it takes between three and six years for a new oil field to start producing.
The Opec oil producers' cartel made a similar point last week.
"While the recent oil market environment has been one of oversupply, it is vital that the industry ensures that a lack of investments today does not lead to a shortage of supply in the future," said Opec's annual report.
The crude oil price is currently about $46 a barrel, have fallen dramatically over the last two years.