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The oil and gas industry is "under siege" OPEC Secretary General Mohammad Barkindo said on Tuesday.
After years of underinvestment on a global scale, the oil and gas industry is now "facing huge challenges along multiple fronts," the Secretary General told delegates at an industry conference in Lagos.
"These threaten our investment potential now and in the long term, to put it bluntly, my dear friends, the oil and gas industry is under siege," Barkindo said, citing geopolitical developments in Europe.
Barkindo also suggested that the supply shortage that would eventually come for the industry as a result of that underinvestment—and as a result of some country's attempted shift away from fossil fuels—could be mitigated if more oil were allowed to be exported from OPEC members Iran and Venezuela.
While nations look to ditch fossil fuels and capacity falls, oil demand continues to grow, sending crude oil prices ever higher, Barkindo said, adding that "For us in Nigeria, fossil fuel will always have a share in our energy mix, for the foreseeable future. We will not at this time abandon fossil fuels. We have adopted gas as a transition fuel."
OPEC's Secretary General sees global oil demand increasing through 2045. Meanwhile, refining capacity in OECD countries fell by 3.3 percent last year.
"The ongoing war in Ukraine, a COVID-19 pandemic which is still with us, and the inflationary pressures across the globe have come together in a perfect storm that is causing significant volatility and uncertainty in the commodity markets in general. More importantly, in the world of energy," Barkindo explained.
Crude oil prices fell by more than 8% on Tuesday afternoon on the fear that the world could soon see a recession, denting oil demand.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.