The world’s biggest oil producers have boosted their search for oil and gas to one of the highest levels in two decades as prices on Tuesday neared record highs of more than $78 a barrel.

The Organisation of the Petroleum Exporting Countries, the cartel that controls three-quarters of global oil reserves, on Tuesday said that its members operated 336 oil rigs last year, an increase of 11.5 per cent since 2005, in response to strong demand from developing countries such as China and India.

The cartel’s annual statistical bulletin shows that member countries were operating the second largest oil rig fleet since 1982, when oil prices hit an all-time high in today’s money of about $90 a barrel. US oil prices on Tuesday rose to $78.23 a barrel, just below the $78.40 nominal high.

The number of oil rigs in operation is seen as one of the best estimates of investment trends. Oil producing countries rarely give out data on the amount of money they invest. Opec is financing its capacity expansion on record revenues of $650bn last year, up 22 per cent from 2005.

The International Energy Agency, the industrialised countries’ energy watchdog, recently warned of an oil “supply crunch” within five years as a result of accelerating consumption growth and output falls in mature areas, such as the North Sea, and long delays in new production projects.

But the sharp increase in Opec’s new investment could reduce the risk of oil demand outstripping supply and lessen long-term oil prices pressures.

The boost to the fleet of oil rigs was led by Saudi Arabia, the world’s largest oil producer, which last year managed a fleet of 75 oil rigs, the largest since the cartel’s records started in 1980, and up 70.5 per cent on the year. The kingdom will deliver a big capacity increase for Opec when it starts production at the 500,000 barrels-a-day Khursaniyah oil field in December.

Patrick Gibson of Wood Mackenzie, the oil consultants, said: “Opec is pushing ahead with new projects and also spending money to drill wells in existing fields to keep production from falling.”

The IEA estimates Opec will have to supply about 36.2m b/d in five years, from today’s 31.3m b/d. That would reduce the oil cartel’s spare capacity to 1.6 per cent of global demand, down from 2 per cent in 2007.

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