Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman on Tuesday said recent acquisitions by major oil firms showed that hydrocarbons were here to stay.
This month, US oil major Exxon Mobil said it was buying Pioneer Natural Resources in a deal valued at $59.5 billion. Meanwhile, Chevron has agreed to acquire smaller rival Hess in a $53 billion deal.
"Exxon [and] Chevron didn't buy because they want to have stranded assets," Prince Abdulaziz said at the Future Investment Initiative in Riyadh.
Asked whether the Opec alliance would continue to be proactive, pre-emptive and precautious, Prince Abdulaziz replied: “But it works.”
Global oil trading is worth $2 trillion and the commodity should be attended to, much like currencies such as the US dollar and the euro, the minister said.
His remarks come as Brent crude, the benchmark for two third of the world’s oil, has risen by about 7 per cent since Hamas, which rules Gaza, launched an unprecedented assault on Israel on October 7.
Israel retaliated with air strikes on Gaza, where the death toll has risen to more than 5,000. Prime Minister Benjamin Netanyahu's government is also gearing up for a ground offensive in the Palestinian enclave, home to more than 2 million people.
Brent crude was trading 1.41 per cent lower at $88.56 a barrel at 6.52pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was down 1.40 per cent at $84.29 a barrel.
Meanwhile, Saudi Aramco, the world’s largest oil-exporting company, expects significant crude demand growth in the second half of the year, its chief executive Amin Nasser said during a separate panel session.
“The call on the industry is [for] 103 million barrels per day [in the second half of 2023] and this is in the middle of economic headwinds,” Mr Nasser said.
Oil demand could grow further in case of economic growth recovery in China, the world’s largest crude importer, he said.
Mr Nasser also said a “one-size-fits-all” energy transition was not acceptable, as it does not consider the economic maturity of each countries.
“You need to make sure that you have adequate, reliable, available [and] affordable sources of energy,” Mr Nasser said.
“We are investing to bring additional capacity of oil and gas and, at the same time, investing in the new energies, which is renewable, green and blue hydrogen."
Marco Arcelli, chief executive of Riyadh-based utility Acwa Power, said he believed in a "balanced mix" of power generation, which means every country can use "all the sustainable resources they can".
"They [the countries] will need some backup, [which] can be provided for a transition that will [go on] for the next decades," he told a panel about renewable energy.
