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UAE And Saudi Ministers Call For More Energy Investment To Meet Rising Crude Demand. | |
| Staff Writer |
At the recently held World Utilities Congress in Abu Dhabi, a clarion call for an increased investment in the energy industry was made by Saudi and UAE ministers as they pushed for collective action with the soaring oil prices.
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The lack of timely investments could lead to a massive energy shortage and this warning comes in the wake of the ongoing Russia - Ukraine skirmish as oil prices continue to trade higher than usual.
“When demand recovers fully, we could see a potential shortage, if we don’t invest," Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure, told the World Utilities Congress in Abu Dhabi on Tuesday.
"We are seeing some investments come back in the US and others, these are good signs.”
As the UAE has been investing there is no massive shortage. Investing in the oil and gas industry took a hit from the Covid-19 pandemic alongside the governments' aggressive efforts to transition to cleaner forms of energy in a bid to cut harmful emissions.
The total investment in the oil and gas sector fell 23 percent below pre-coronavirus levels taking the total to 341billion in 2021, according to the International Energy Forum and IHS Markit.
The sector needs $600 billion of investment until 2030 to keep pace with rising demand, Dr Al Jaber, the Minister for Industry and Advanced Technology,said.
Oil and gas will account for more than 50 percent of the global energy mix by 2045 and will continue to play an important role despite the energy transition. OPEC countries contribute to a wholesome 40 percent of the crude oil produced worldwide.
“We meet [on a] monthly basis, we look at every aspect that affects demand … we are doing much more to cover our share in the area of supply. We are taking the burden … we’ve been transparent.”
Brent, the global benchmark for two-thirds of the world's oil, is up more than 30 percent since the start of this year after falling from a 14-year high. The group of oil producers which achieved a historic reduction of 9.7 million barrels per day between May 2020 and July last year, is unwinding cuts due to improving demand.
Opec’s biggest producer is boosting production capacity as well as refining to cater to global demand and seeks to keep geopolitics out of its decision-making.
“The world needs to wake up to an existing reality," he said. "The world is running out of energy capacity at all levels.”
And this is the reality that the world has to face.