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 now faces “huge challenges on 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, referring to geopolitical developments in Europe.
Barkindo also suggested that the supply shortfall that would eventually arise for the industry as a result of that underinvestment — and as a result of a country’s attempt to move away from fossil fuels — could be mitigated if more oil was allowed to be exported. from OPEC members Iran and Venezuela.
As countries look to dump fossil fuels and capacity decline, oil demand continues to grow, pushing crude oil prices ever higher, Barkindo said, adding that “For us in Nigeria, fossil fuel will always be a part of our energy mix, for the foreseeable future. At this point, we will not abandon fossil fuels. We have adopted gas as a transition fuel.”
The OPEC Secretary General sees global demand for oil increasing until 2045. Meanwhile, refining capacity in OECD countries fell by 3.3 percent last year.
“The ongoing war in Ukraine, a COVID-19 pandemic that is still among us, and inflationary pressures around the world have converged in a perfect storm that is causing significant volatility and uncertainty in commodity markets in general. More importantly , in the world of energy,” explains Barkindo.
The price of crude oil fell by more than 8% on Tuesday afternoon on fears that the world would soon experience a recession, which would lower demand for oil.
By Julianne Geiger for Oilprice.com
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