OPEC Secretary General Haitham Al Ghais refutes claims of the oil era's end, emphasizing the resilience of oil demand and advocating for balanced energy policies to prevent investment shortfalls.
In a recent op-ed for the Middle East Economic Survey, OPEC Secretary General Haitham Al Ghais urged caution against forecasts proclaiming the imminent end to the oil era, warning that such predictions could lead to dangerous underinvestment in the oil and gas sector. Al Ghais highlighted that despite claims of a demand decline, oil demand remains resilient, and the current rate of investment in new oil projects is not keeping pace.
OPEC has been vocal in challenging the notion that the world is on a fast track to abandon oil in favor of alternative energy sources. These challenges are posed against organizations like the International Energy Agency (IEA), which has suggested that demand for hydrocarbon fuels will peak by 2030. Al Ghais pointed out that, contrary to some predictions, sales data for Electric Vehicles (EVs) in the first quarter indicated a slowdown, and in Norway, a high EV penetration rate has not significantly reduced oil demand.
“Such assertions, despite all evidence to the contrary, are all the more dangerous given their potential to foster energy policies that stoke energy chaos,” Al Ghais stated, referencing a report by the Economist on "the end of oil."
Al Ghais criticized the shift in focus from reducing emissions, as outlined by the Paris Agreement, to a rigid narrative of reducing hydrocarbon demand without fully considering the impacts on energy security, socio-economic development, or addressing energy poverty. He argued that current opposition to technologies like carbon capture, which could reduce emissions from oil and gas, appears to prioritize ending the oil industry over reducing emissions.
The OPEC chief also brought attention to the issue of energy poverty, noting that while cheap wind and solar energy solutions are often promoted, they have not been widely adopted in some of the world's poorest countries. He suggested that international financial institutions are constraining funding for energy projects that are not aligned with transition targets, potentially exacerbating energy poverty.
Despite warnings of a waning oil industry, Al Ghais maintains that oil demand is not declining as some reports suggest. He emphasized the need for continued investment in oil supply to prevent a future deficit and consequent price hikes, which would be detrimental to consumer countries.
