$12.1tn investment needed to prop up world oil

16 May 2023

A successful and sustainable energy transition will require world nations to be “inclusive”, even of oil, says OPEC.

In a press conference, OPEC secretary-general Haitham Al Ghais told state news agency WAM the solution to ever-growing energy consumption must consider the role of oil and oil-producing countries for stability.

Al Ghais said: “The challenges for energy, climate and sustainable development are enormous and this means the parameters of the discourse need to be inclusive.

“Imagine a world without oil and the multitude of essential daily products that are derived from it [...] Essential services that people depend on would vanish, transportation would grind to a halt, many homes would be without heat, people’s health would suffer, global food supply chains would be disrupted and energy poverty would rise further.”

Instead he argued for a “just and sustainable” energy transition which did not block specific countries or industries but heard every voice at the table. 

The statement came in response to news that annual oil investments have dropped since the pandemic, due in part to a greater global push on environmental targets. Yet global energy consumption is forecast to rise 23% by 2045, according to the OPEC World Oil Outlook 2022.

To ensure both future energy security and lower emissions, Al Ghais said will require “unprecedented” collaboration and investment.

He said: “For the oil industry alone, which will make up almost 29% of the world’s energy needs by 2045, global investment requirements total $12.1tn between now and then. This equates to more than $500bn each year.”

Despite OPEC’s investments in clean technologies, he said there is no one size fits all solution and “the sustainability of the global energy system is at stake without a long-term, investment-friendly climate that works for producers and consumers”.

He concluded: “We fully support a global, multilateral approach, with collaboration at the fore. We need to work with one another, and not against one another.”

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