OPEC warns of underinvestment in oil and gas sector amid rising demand
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OPEC Secretary General says restricting funds to alternative energy sectors will have grave long-term consequences on the carbon-based energy sector.
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Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), Haitham Al-Ghais, speaks at a meeting marking the 62nd anniversary of the organization, in Caracas, Venezuela, September 14, 2022. (Reuters)
Underinvestment in the carbon fuels sector may lead to volatile long-term and imperil growth, warned OPEC Secretary General Haitham Al-Ghais on Monday.
The official also highlighted the necessity of reducing greenhouse gas emissions instead of focusing on substituting energy produced by burning oil and gas with other forms of energy.
Al-Ghais stressed that investments should be distributed to all energy sectors and the inability to do so will have grave consequences, further adding, "That is the truth that needs to be spoken."
The organization estimates that the global gas and oil sector needs a total of $12.1 trillion in funding to meet long-term expectations.
The official statements made at the Middle East Petroleum and Gas Conference in Dubai, where Fereidun Fesharaki, chairman of FGE Consultancy, explained that the rise of global demand for oil by around 8 million barrels per day will cause supply problems around the world as Western sanctions directed at Russia's energy industries shifted European demand to alternative suppliers.
Russia can maintain production capabilities at 10 to 11 million bpd, but the country will not expand its production to meet global demand amid sanctions on Moscow.
Ten rounds of sanctions against various Russian industries have failed to strangle the Russian economy, which has managed to stay afloat. Russian productivity is thriving in a range of economic sectors, including the production of microchips, trucks, banknotes, chemicals, and luxury bags.
The Group of Seven wealthy nations and Australia have set price caps on Russian petroleum products and crude oil at $60 per barrel in coordination with the European Union.
In response, President Vladimir Putin signed a decree to ban the sales of crude oil to countries abiding by the Western-led price cap on Russian oil. It also announced a production cut of 500,000 barrels per day while its allies in the OPEC+ group of oil producers, including Saudi Arabia, also agreed to slash output.
