With widening acceptance of the “lower for longer” oil price thesis, it’s interesting to ponder the possible implications of a multiyear contraction in oil and gas capex. Doing so involves sailing into largely unchartered waters.

From 1988 to 2014, global upstream capex declined in only two years, according to Simmons & Co. International data. The declines happened a decade apart. In 1999, capex fell 15% year-over-year, rebounding 24% the following year. In 2009, it similarly dropped by 15%, bouncing back the next year by 18%.

But global upstream capex never declined for two consecutive years over this period—a trend that looks all but certain to be broken amid the current plunge in commodity prices.

Following an estimated 2% contraction in upstream spending in 2014, this year’s prospective capex cut of north of 20% is “the most significant decline in the last 20 years,” according to Simmons research, and will be followed by another drop in spending in 2016 that is likely to exceed 10%, assuming Brent oil prices are sub-$60/bbl. In sum, a multiyear period of declining capex lies ahead.

While much discussion focuses on moves up or down in U.S. production, less attention is paid to the much larger non-OPEC, non-U.S. production base, which comprises roughly 45 million barrels per day (MMbbl/d) of mainly conventional production. To a large extent made up of larger, longer lead-time projects, this production tends to be less sensitive to short-term oil price fluctuations—but only up to a point.

Eventually, short-term concerns become long-term, and low oil prices and cash flow scarcity take their toll. Already, as outlined in our cover story, “Oil in the New World Order,” visibility has begun to evaporate beyond 2017 as regards the pipeline of long lead-time, non-OPEC projects. Since last year’s OPEC meeting, some 5 MMbbl/d of major projects have been cancelled or delayed, bringing the total to 6.4 MMbbl/d.

Meanwhile, among OPEC countries, Iraq is the only member that has been forecast to add materially to productive capacity in the next five years. But even now, the question arises as to how Iraq has increased output by 800,000 bbl/d since last November, as government finances have been strained by both tumbling oil prices and the ongoing war against the Islamic State, or ISIS.

A recent Morgan Stanley report puts Iraqi production in July at 4.2 MMbbl/d, up from 3.2 MMbbl/d a year ago, making Iraq the strongest contributor to global supply growth. The increase is attributed to removing export and infrastructure constraints in the south of Iraq, with the completion of the Iraq Crude Oil Export Expansion Project, and significant increases in pipeline and production capacity in Kurdistan.

In addition, Iraq introduced a new crude blend, called Basrah Heavy, to be sold alongside its existing Basrah Light blend. Splitting the crude into heavy and light streams has enabled Iraq to stabilize sales of light oil, which suffered from heavy oil being mixed in with lighter production, while also allowing unconstrained production from heavier oilfields.

However, these infrastructure and marketing tailwinds “are now largely played out,” according to the report, and Iraq now faces “several key challenges.” Chief among these is the country’s drop in foreign currency reserves, which the International Monetary Fund in July estimated would fall by more than half by the end of 2016, from $68 billion to $30 billion, assuming a $50/bbl Brent oil price.

In addition, Morgan Stanley said that the government has asked operators at some of Iraq’s largest oilfields to reduce activity to moderate the cost recovery burden under technical service contracts. These contracts provide for costs to be recovered in the form of barrels now sold at much lower prevailing oil prices, meaning significantly more barrels must be sold to cover a given cost. The lower activity is estimated to translate into about a 30% cut in capex at these key fields.

With production gains already booked from infrastructure debottlenecking projects, along with capex cuts at key fields and a risk of delays with major projects, Morgan Stanley lowered its estimates of Iraqi output through 2020. A previous forecast showing a rise in output to 4.61 MMbbl/d now calls for Iraqi production to decline slightly to 4.13 MMbbl/d by 2020—a swing factor of 480,000 bbl/d.

And these are just a few signs of what may unfold in a multiyear capex crunch.