The oil industry must step up exploration and investment in new supply; otherwise, the world risks a supply shortage, according to Amin Nasser, the chief executive of the Saudi state oil giant Aramco.
“We had a decade…where people didn’t explore. It’s going to have an impact,” Nasser told the Financial Times.
“If it doesn’t happen, there will be a supply crunch,” said the top executive of the world’s biggest oil firm by both production and market value.
Earlier this week, Nasser said in a speech at the 2025 Energy Intelligence Forum that the energy transition faces a reality check and reality on the ground points not to an energy transition, but to “an energy addition which requires all hands on deck.”
“We also see resilient demand, and the pressing need for long-term investments in supply is now widely accepted,” Nasser said.
Aramco and OPEC have been warning for years that the dearth in oil exploration, also driven by net-zero policies in recent years, would come back to bite the global consumers and economies with not enough oil supply.
The world needs more investment in oil and gas as they will continue to account for a large part of the energy mix in 2050, OPEC Secretary General Haitham Al Ghais said on Wednesday, reiterating the cartel’s view that investment in new supply will be needed in the foreseeable future.
The world needs global oil industry investment of $18.2 trillion out to 2050, Al Ghais wrote earlier this year in a foreword to OPEC’s 2025 annual World Oil Outlook (WOO). The latest OPEC take on global energy is that oil demand is set to continue rising through 2050, with consumption expected at 123 million barrels per day (bpd) then, up from about 104 million bpd this year.
Without a jump in exploration and supply investment, a shortage is looming, Aramco and OPEC say.
In recent months, energy security and affordability have trumped fears of stranded assets, prompting the world’s biggest international oil and gas firms to shift focus back to exploration after years of trying to develop clean energy solutions.
By Tsvetana Paraskova for Oilprice.com
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