While energy companies have put the brakes on capital spending thanks to low crude prices, in a few short years there won't even be enough oil to meet demand, former Shell Oil CEO John Hofmeister predicted Thursday.
"We cannot ever produce enough oil, in my opinion, to satisfy global demand five or 10 years out. We have to start using natural gas and more biofuels as a source of transportation fuel," he said in an interview with CNBC's "Power Lunch."
On Thursday, the American Petroleum Institute reported petroleum deliveries rose by 3.6 percent from a year ago to 19.7 million barrels a day, making it the highest April deliveries in eight years.
Oil prices have been slowly climbing back up since they hit 12-year lows in the first quarter, thanks to falling U.S. production and unexpected supply constraints hitting Libya and the Americas.
Those oil lows came about because of oversupply issues and led big names to slash capital spending by tens of billions of dollars. Exxon Mobile, for example, said in March it would cut capex to $23 billion, down 25 percent from the previous year.
Capex estimates for global bigwigs Shell, Exxon Mobile, Chevron, Total, BP, Statoil and Eni total $144.8 billion for 2016, down from $211.5 billion in 2013, according to data collected by Reuters.
Hofmeister, now CEO of Citizens for Affordable Energy, believes those cutbacks will primarily affect the industry for the next two to three years and may extend further if oil prices stay low.
"In reality, three to five years from now we should be seeing the industry coming back at a higher capital spending rate because, I believe, the oil price will sustain it," he said.
In the meantime, he expects an equilibrium to be established within the industry, as well as somewhat higher prices, in six to 12 months.
"The consumers are wanting 94 to 95 million barrels of oil a day. And at these low prices, they want even more," said Hofmeister.
"What has to happen is an equilibrium has to be established which gets an oil price high enough that companies can invest and can grow their supply, because without the supply growth we're going to see even more tighter demand and even higher prices."
—Reuters contributed to this report.