Delays to projects caused by increasing construction costs are likely to mean that the global oil market will see as much as 40 per cent less additional refining capacity in 2012 than may have originally been expected.

That is according to the latest analysis from the advisory firm International Energy Agency (IEA), which has just released its Medium-Term Oil Market report for the period 2008 to 2013.

According to the organisation, increased costs at all points of the refining process have added around 50 per cent to investment expenditures over the past two years alone, with weakening gasoline prices and rising crude oil costs likely to exacerbate the situation.

"This, in combination with rising lead times for delivery of upgrading and hydrotreating units, has caused significant slippage to expected capacity expansions, reducing our 2012 global crude distillation capacity estimate by 1.0 million barrels per day from last year's assessment," the report read.

As such, just 1.44 million barrels per day of additional refining capacity will come online in 2012, IED concluded.

At the same time, global demand for oil is expected to increase to 94.14 million barrels per day by 2013, up from the current level of 86.87 million.