OPEC’s Barkindo stresses importance of oil market stability and investment

OPEC’s Barkindo stresses importance of oil market stability and investment

The Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, will continue to assess the oil market on a month to month basis and take necessary action to ensure stability in the market, OPEC Secretary General Mohammad Barkindo said on Wednesday.

“We will continue to take a month by month approach to assessing market conditions and stand ready to take any necessary actions through the Declaration of Cooperation partners,” he said in prepared remarks to the S&P Global Platts Americas Petroleum and Energy Virtual Conference on Wednesday, referring to the OPEC+ agreement to curb output.

In his remarks, he stressed the importance of making sure that there will be enough energy to meet demand in the long term.

Read: Oil and gas interests say drilling pause only hurts already struggling Americans

The world will
continue to need more energy in the decades ahead, said Barkindo, pointing out
that looking longer term to 2045, the global economy is expected to more than
double in size.

“The basic
challenge is simple,” he said. “How can we ensure that there is enough energy
supply to meet expected future energy growth, and how can this growth be
achieved in a sustainable way — balancing the needs of people in relation to
their social welfare, the economy and the environment?”

It’s “vital
that the required investments are made in all energies to ensure stable and
continuous supplies and to help reduce and, ultimately, eliminate emissions,”
he said.

At the same
time, he also emphasized that “we do not deny the existence of climate change,”
and the science and statistics say that the “we need to reduce emissions and
use energy more efficiently.”

“We do not deny the existence of climate change.”

— Mohammad Barkindo, OPEC secretary general

Renewable energy sources are “coming of age, with wind and solar expanding quickly but even by 2045, are only estimated to make up just over 20% of the global energy mix,” he said. Oil and natural gas will still supply over 50% of the world’s energy needs by 2045, he added, with oil at around 27% and gas at 25%.

On Wednesday, prices for both West Texas Intermediate crude
the U.S. benchmark, and Brent crude
the global benchmark, stood close to the levels they traded at before the COVID-19 pandemic wreaked havoc on the global economy.

March WTI crude settled at $52.85 a barrel, up 24 cents, or 0.5%, while March Brent crude edged down by 10 cents, or 0.2%, to $55.81 a barrel.

There are no reputable outlooks projecting that “renewables will come anywhere close to overtaking oil and gas in the decades ahead, said Barkindo.

He also welcomed the Biden administration’s decision to rejoin the Paris climate agreement and said that “the energy transition and the global conversation around it would be incomplete without the United States at the head of the multilateral table.”

the global economic recovery has been “fragile and uncertainties remain,” said
Barkindo. Renewed lockdowns serve as a “harsh reminder of how delicate the
situation remains. Nonetheless, we are cautious optimistic for the global
economic rebound in 2021.”

“More broadly, energy market stability will be vital to the energy transition stability,” he said.

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