Oil cartel boss issues a warning about persistently rising prices
According to the Opec+ secretary general, while energy demand rises, oil prices will remain high.
The 23 oil-exporting nations that make up Opec+ decide how much crude oil will be sold on the international market.
According to Haitham Al Ghais, “We see demand growing about 2.4 million barrels a day.”
Saudi Arabia announced that it would reduce its daily crude oil production by a million barrels in order to raise prices.
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The decision by Saudi Arabia and Russia, two large oil producers and Opec+ members, to cut output may result in a “significant supply shortfall” by the end of this year, according to the International Energy Agency (IEA).
“This is a voluntary decision made by two,” Mr. Al Ghais stated.
Oil prices rose after Russia’s invasion of Ukraine in February 2022, reaching more than $120 a barrel in June of the previous year. In May of this year, they retreated to just over $70 a barrel, but since then, as producers have worked to limit supply to maintain the market, they have slowly rebounded.
With supplies expected to be reduced, the price of Brent oil, a benchmark for prices, exceeded $95 per barrel on Tuesday, raising concerns that it may go above $100. The increase sparked concerns that inflation in important economies would persist and led to a warning to drivers that fuel costs may climb in the ensuing 10 months.
Opec, according to Mr. Al Ghais, is more worried about “underinvestment” in the oil industry.
Al Ghais responded that it was “important not to look at things in a short-sighted manner” when asked if he was concerned about how rising oil prices might effect inflation throughout the world if they reach $100 per barrel.
“For the upcoming year, we anticipate demand to increase by more than 2 million barrels per day, subject to certain market risks, of course. However, we remain pretty optimistic that this year’s global oil demand will be quite resilient.
According to Mr. Al Ghais, the oil sector will require close to $14 trillion in investments by the year 2045.
The demand for all types of energy will increase by around 25% by the year 2045 compared to what it is now.
