There is a limit to how big a role U.S. shale can play in the global oil market, according to the chief executive of BP, who said traditional producers such as Saudi Arabia would continue to exert more influence over crude prices.

Bob Dudley said he had become less worried about the extent to which U.S. shale resources could hold down prices as more was learned about their geology.

“There are cracks appearing in the model of the Permian being one single, perfect oilfield,” he told the Financial Times, referring to the region of Texas and New Mexico at the centre of the shale revolution.

Surging production of U.S. shale oil and gas, made possible by advances in drilling technology which has given access to hydrocarbons trapped in “tight” rock formations, has weakened the stranglehold of OPEC producer nations over the crude market.

But Dudley said that emerging technical challenges called into question the ability of shale companies to rival conventional producers over the long term.

“I don’t think [U.S. shale] will be the perfect swing producer now,” he said. “For a while, I was worried. But I think it is going to be less solid.”

The OPEC cartel, acting with Russia, has reasserted its influence over the market in the past year by agreeing production cuts that have pushed crude prices back above $60 a barrel after a deep three-year downturn caused by the shale boom.

The recovery in prices has spurred growth in US tight oil output, which the International Energy Agency said this month would cause global supplies to exceed demand in the first half of next year.

However, analysts at Wood Mackenzie, the energy consultancy, have warned that expansion of U.S. shale production will become harder in the 2020s as the “easiest” resources are drained.

U.S. “supermajors” ExxonMobil and Chevron are among those investing heavily in U.S. shale, even as independent producers such as Marathon Oil and Continental Resources face investor scrutiny over poor returns on capital.

BP has significant onshore US gas resources from Wyoming to Texas and it is also investing in Argentine shale. But most of its capital remains committed to large conventional oil and gas projects.

Competition from shale has deterred investment in conventional resources in recent years, leading some in the industry to predict an oil supply crunch.

“I’m not yet in the camp that we’re going to end up with a big price spike because of low investment,” said Dudley. “There’s a lot of investment that’s been deferred, that’s for sure. But there are other swing producers like Saudi Arabia who can pull it back.”

Dudley acknowledged that oil faced long-term competition from electric vehicles but said the technology had been “hyped” and that environmental problems surrounding the mining and disposal of materials used in lithium-ion batteries that power electric vehicles had been under-estimated.

He added: “For at least 10 years, and probably longer, oil demand will go up because of prosperity and population growth. And then, when it starts to go down, it’s going to be a gradual decline. So there will be, until well into the second half of the century, a need for oil.”