Arab ministers are urged to face the harsh reality.
According to the energy ministers of the two largest oil-producing OPEC member countries, chronic underinvestment in conventional energy threatens to leave the planet with a lack of free production capacity for oil and oil products, as well as gas.
Senior energy officials from the Middle East have long warned of a lack of investment and the negative impact this could have on the global economy as it recovers from the pandemic.
“We must wake up and face the harsh reality,” Saudi Energy Minister (KSA) Prince Abdulaziz bin Salman urged at the Future of Aviation international forum in Riyadh. “The world is running out of available energy capacity at all levels. »
The KSA energy director responded to inquiries from his American colleagues, where, despite all the efforts of the White House and the authorities, gas station prices set another anti-record – the average price of gasoline in the United States reached $4.37 per gallon. He is convinced that high prices for gasoline, as well as for diesel fuel and kerosene, are due to the lack of investment in the oil refining industry.
Prince Abdulaziz advises rethinking the general enthusiasm with which the West has recently embarked on a forced clean energy transition based on phasing out fossil fuels and replacing them with renewable energy alternatives. Under pressure from a public that until recently only wanted to hear about clean energy, banks are extremely reluctant to finance new conventional energy projects, which has led to the current dire situation.
A further decline in investment in traditional energy, assures the Minister of Energy of Saudi Arabia, will further increase the imbalance between oil demand and supply in the direction of demand.
The host of the international energy conference in Abu Dhabi, the Minister of Energy of the United Arab Emirates (UAE) Suheil Al Mazrui prepared an even more unpleasant surprise. He warned, Oil Price reports, that OPEC+ would not be able to guarantee sustainable and sufficient supplies of oil to the global economy.
Suheil Al-Mazrui attributed the extremely high volatility in the oil markets in recent weeks to the refusal of individual buyers to buy certain grades of oil, referring to the refusal of many Western companies to buy Russian oil. He refused to take any responsibility for high fuel prices, which the West blames not only on Russia, but also on the Arab oil-producing countries, which would refuse to increase oil production.
The fact that these warnings come from the energy ministers of only two oil-producing countries, which are considered to have more or less sufficient spare capacity, gives them special weight and makes them think. Despite pressure from the West, Riyadh and Abu Dhabi refuse to increase oil production, citing the fact that the market is now balanced. As for the record volatility, it is explained by the underfunding of the sector and geopolitical factors. Neither of these two causes can be influenced by Saudi Arabia and the United Arab Emirates.
Avic translation for the international network