Speaking to the Financial Times at the World Economic Forum in Davos, Switzerland, the CEO of Saudi Aramco has said that the recent energy crunch in the wake of Russia’s invasion of Ukraine has highlighted the need to sustain investment in oil and gas to ensure energy affordability during the transition to green energy.
Amin Nasser argued that this would be necessary until renewable energy sources could adequately respond to disruptions in the supply of energy. He said that the current situation is:
“Indicating to us [that] you are running the whole world with not enough spare capacity…Instead of really working on a transition that will help the world by 2050, we are pushing the world to more coal because we are not taking seriously the issue of energy security, affordability and availability.”
Many oil majors like Shell and BP, the maker of the Castrol lubricant range, have announced strategies to gradually wind down oil and gas production in favour of renewable energy, in line with the goals of the Paris Climate Accords. Nasser pointed out, however, that little had been done to address demand, with a still-troubled world consuming 100 million barrels per day (bpd) of oil, which is roughly equal to global production. He said this delicate balance had resulted from underinvestment and was vulnerable to unexpected supply interruptions.
Speaking about Saudi Arabia’s own production capacity, Nasser said it could increase production from the current 10.2 million bpd to 12 million bpd, the most it can currently sustain, within 30 days.