After, in recent months, crude oil prices have clearly recovered from their COVID-19 collapse on steadily increasing demand, Russian Deputy Prime Minister Alexander Novak addressed the much-anticipated decision-making in the next OPEC + conference scheduled for August and the expectation that it will decide to increase production significantly beyond the current pandemic-induced strategy of gradually releasing more barrels in a strengthening oil market.
Novak said in his Thursday remarks at the St. Petersburg International Economic Forum that while it is still “premature” to talk about production decisions for August, he asserted that “the current price of oil is good enough for Russia”, adding: “Oil prices reflect the balance of supply and demand, âand noted that seasonal oil demand is expected to increase in the third quarter of the year. Wednesday Brent crude futures hit its highest price since September 2019 to $ 71.99, with the international benchmark gaining 1.6%, after the day before the benchmark rose nearly 3%.
Novak confirmed that the next OPEC + conference will address and finalize oil production for August and other months, while stressing that oil prices are rising too high “may force users to switch to other energy sources.” Related: Climate Revolt Against Big Oil Could Cause Crude Prices to Soar
On this front in particular, he lambasted the current IEA proposals and an advanced “road map” that could ultimately lead to $ 200 a barrel of oil (!):
If the world were to follow the International Energy Agency’s controversial roadmap, according to which investments in new areas should stop immediately and reach net zero carbon emissions by 2050, âThe price of oil will go to, what, $ 200? Gas prices will skyrocket â, Novak said.
And understandably Qatar and Saudi Arabia have backed this dire assessment, vowing to continue expanding their oil and gas facilities while pointing fingers at climate activists for seeking to starve the industry’s money. Bloomberg presents Gulf statements on Thursday as following:
The “euphoria” around the clean energy transition is “dangerous”, Qatari Energy Minister Saad Sherida Al Kaabi said Thursday at the St. Petersburg International Economic Forum in Russia.
“When you deprive the company of additional investment, you have big price spikes”, he said.
As a reminder, the IEA roadmap defined in the Paris Agreements to achieve zero net carbon emissions by 2050 requires emissions to be reduced as much as possible and then to offset the rest through âdecarbonisationâ plans financed by carbon credits.
However, as we have detailed before, with economists expect global growth to accelerate at even faster rates thanks to the injection of stimulants inspired by the pandemic, it follows that the demand for energy will also increase more rapidly. Despite this, many economists and scientists expect improvements in energy efficiency and the shift to renewables to mean that global energy demand will be around 8% lower than it is today. 2050, even though the global economy will be more than double what it is today.
With that in mind, it is perhaps the recent Saudi comments from St. Petersburg that have best highlighted it, reject the “la-la-land” scenario in a previous statement …
âSaudi Energy Minister Prince Abdulaziz bin Salman has already rejected the IEA’s roadmap, which would limit the average rise in global temperatures to 1.5 Â° C, calling it la-la-terre scenario, he said according to Bloomberg. “When asked on Thursday if the oil was dead, he responded by saying that the kingdom was increasing its production capacity.”
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