OPEC Ministers Say More Oil Needed, Dig At Energy Transition Economics

Leading ministers from the Organization of Petroleum Exporting Countries or “OPEC” said the world needs more oil to meet its growing energy footprint, at their biennial international seminar in Vienna, Austria on Wednesday.

The 9th installment of the OPEC International Seminar saw the Saudi energy minister and de facto leader of the producers’ group Prince Abdulaziz bin Salman warn against hurting global economic growth and consumer “affordability” in the name of energy transition, multiple attendees told this correspondent.

The minister added that while renewable energy sources continue to grow, oil and gas will remain “indispensable” in supporting the economic progress of developing countries, and ensuring the steady output of mission critical hard-to-abate sectors like heavy industry, aviation and haulage.

Prince Abdulaziz said that many nations around the world were rapidly coming around to the realization that hydrocarbons were critical for ensuring their energy security.

Additionally, the Saudi Gazette reported that the minister emphasized that Riyadh is following a consistent and coherent approach that balances vision and transition implementation. “Sustainability must be understood more comprehensively to include economic and commercial dimensions, not just environmental ones,” he noted.

Third-party citations and attendee relays were needed after OPEC withheld media access to the major industry event from a number of organizations, according to three people familiar with the matter. Those restricted include major global newswires. Instead, it has opted to restrict access to a handful of “media partners” and selected market data aggregators.

Emails to the OPEC media office for access queries went unanswered, and a spokesperson at the venue said they were instructed to tell “non-partner” media requesting access “that the venue was full.” The incident marks a repeat of what happened in 2023 when the seminar was last held.

Away from the seminar halls, United Arab Emirates energy minister Suhail Al Mazrouei said the oil market was thirsty for more, and has so far lapped up every increase in production OPEC has thrown its way.

At their meeting on Saturday, eight members of OPEC+, a select group of Russia-led oil producers and OPEC spearheaded by Saudi Arabia, opted to raise their collective production levels for August by another 548,000 barrels per day. The action, which took the market by surprise, followed three consecutive output hikes of 411,000 bpd announced by OPEC+ in recent months.

The series of hikes are part of OPEC’s attempt to unwind 2.2 million bpd of previously agreed cuts since 2022. The latest hike implies that 1.92 million bpd (or over 87%) of those cuts have now been unwound.

On the sidelines of the seminar, Reuters – another media organization that has its access withheld – reported Al Mazrouei as having said: “You can see that even with the increases for several months we haven’t seen a major buildup in inventories, which means the market needed those barrels.

“What we want is stability and you cannot be short-sighted just by looking at the price. We need the price to be right for investments to happen.” Al Mazrouei also said that many countries with large oil reserves were still not investing enough.

Markets are now pricing in OPEC+ to completely unwind its voluntary cuts for September when it meets next month.