The UAE’s Energy Minister on Thursday said he was more concerned about the supply of crude oil than demand amid ageing oilfields and underinvestment in new projects.
The world consumes more than 100 million barrels per day of crude and about 8 million bpd of production needs to be replaced every year but the current level of investment is not sufficient, Suhail Al Mazrouei, Minister of Energy and Infrastructure, told the Opec Seminar in Vienna.
“The pace of growth [in crude] demand in the past 10 years was between 1 to 1.5 per cent every year … now it’s 2 per cent,” Mr Al Mazrouei said.
“We heard the story of peaking demand five years ago [and even] 10 years ago.”
The International Energy Agency expects global oil demand growth to slow significantly by 2028, as high prices and supply concerns hasten the shift to cleaner energy.
In a report last month, the Paris-based agency also said “peak oil demand” could be in sight before the end of the decade.
Opec+, an alliance of 23 oil-producing countries, “knows better” because it represents 40 per cent of the world’s production, Mr Al Mazrouei said.
At the event, energy companies blamed policymakers and politicians for the current underinvestment in the industry.
International oil majors have reduced spending over the past few years amid increasing pressure from governments and institutional investors.
The policies “do not make sense”, the chief executive of UAE’s Crescent Petroleum said during a panel session on Thursday.
“It’s like trying to solve obesity by cutting off loans to farmers and doing nothing about the restaurants and supermarkets,” Majid Jafar said.
Choking off oil and gas supply is causing more frustration in Asia and Africa, while making it harder to achieve basic needs and services, he added.
Bernard Looney, chief executive of BP, said the events of the past couple of years show that energy is the “lifeblood” of the society.
The world must build a cleaner energy system, but that can only be done by ensuring energy security and affordability, Mr Looney said.
“At the same time, we must invest in the energy system of today and if we don’t invest in that, we will have a mismatch in demand and supply,” he said.
Oil and gas upstream capital expenditure rose by 39 per cent to $499 billion last year, the highest level since 2014, according to the International Energy Forum.
However, annual upstream spending needs to increase to $640 billion by 2030 to ensure adequate supplies, the IEF has said.
“We need energy to fuel our growth and some idealists tend to forget that there are burgeoning economies south of the equator and east of the Suez,” said Tengku Taufik, chief executive of Malaysia’s Petronas.
“We need a non-binary approach to energy security. You are not going to have a successful energy transition without energy security.”
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The currency conundrum
Russ Mould, investment director at online trading platform AJ Bell, says almost every major currency has challenges right now. “The US has a huge budget deficit, the euro faces political friction and poor growth, sterling is bogged down by Brexit, China’s renminbi is hit by debt fears while slowing Chinese growth is hurting commodity exporters like Australia and Canada.”
Most countries now actively want a weak currency to make their exports more competitive. “China seems happy to let the renminbi drift lower, the Swiss are still running quantitative easing at full tilt and central bankers everywhere are actively talking down their currencies or offering only limited support," says Mr Mould.
This is a race to the bottom, and everybody wants to be a winner.
Five healthy carbs and how to eat them
Brown rice: consume an amount that fits in the palm of your hand
Non-starchy vegetables, such as broccoli: consume raw or at low temperatures, and don’t reheat
Oatmeal: look out for pure whole oat grains or kernels, which are locally grown and packaged; avoid those that have travelled from afar
Fruit: a medium bowl a day and no more, and never fruit juices
Lentils and lentil pasta: soak these well and cook them at a low temperature; refrain from eating highly processed pasta variants
Courtesy Roma Megchiani, functional nutritionist at Dubai’s 77 Veggie Boutique
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
5 of the most-popular Airbnb locations in Dubai
Bobby Grudziecki, chief operating officer of Frank Porter, identifies the five most popular areas in Dubai for those looking to make the most out of their properties and the rates owners can secure:
• Dubai Marina
The Marina and Jumeirah Beach Residence are popular locations, says Mr Grudziecki, due to their closeness to the beach, restaurants and hotels.
Frank Porter’s average Airbnb rent:
One bedroom: Dh482 to Dh739
Two bedroom: Dh627 to Dh960
Three bedroom: Dh721 to Dh1,104
• Downtown
Within walking distance of the Dubai Mall, Burj Khalifa and the famous fountains, this location combines business and leisure. “Sure it’s for tourists,” says Mr Grudziecki. “Though Downtown [still caters to business people] because it’s close to Dubai International Financial Centre."
Frank Porter’s average Airbnb rent:
One bedroom: Dh497 to Dh772
Two bedroom: Dh646 to Dh1,003
Three bedroom: Dh743 to Dh1,154
• City Walk
The rising star of the Dubai property market, this area is lined with pristine sidewalks, boutiques and cafes and close to the new entertainment venue Coca Cola Arena. “Downtown and Marina are pretty much the same prices,” Mr Grudziecki says, “but City Walk is higher.”
Frank Porter’s average Airbnb rent:
One bedroom: Dh524 to Dh809
Two bedroom: Dh682 to Dh1,052
Three bedroom: Dh784 to Dh1,210
• Jumeirah Lake Towers
Dubai Marina’s little brother JLT resides on the other side of Sheikh Zayed road but is still close enough to beachside outlets and attractions. The big selling point for Airbnb renters, however, is that “it’s cheaper than Dubai Marina”, Mr Grudziecki says.
Frank Porter’s average Airbnb rent:
One bedroom: Dh422 to Dh629
Two bedroom: Dh549 to Dh818
Three bedroom: Dh631 to Dh941
• Palm Jumeirah
Palm Jumeirah's proximity to luxury resorts is attractive, especially for big families, says Mr Grudziecki, as Airbnb renters can secure competitive rates on one of the world’s most famous tourist destinations.
Frank Porter’s average Airbnb rent:
One bedroom: Dh503 to Dh770
Two bedroom: Dh654 to Dh1,002
Three bedroom: Dh752 to Dh1,152
