Houston: Saudi Arabia’s top oil official dismissed the notion that global demand may soon peak and leave billions of barrels of untapped crude stranded in fields that will never be drilled.
Khalid Al Falih, energy minister for the world’s biggest oil-exporting nation, called talk about peak demand among energy executives, analysts and activists “misguided,” and predicted worldwide demand will reach 100 million barrels a day “very soon.”
Al Falih made his remarks Tuesday during his address to a packed house at CERAWeek by IHS Markit in Houston, the most influential oil industry conference of the year.
Although Al Falih framed his comments in the wider context of the need to invest in future oil production, his warning comes as the kingdom prepares to sell shares in its state-owned energy giant Saudi Aramco. The Aramco public offering is on track for a 2018 listing, he said. The company and government officials are working on bringing internal accounting in line with standards observed by publicly traded companies, he said.
Al Falih’s assessment drew support from powerful voices in the international energy sphere.
There is “no peak in oil demand we see,” said Fatih Birol, the executive director at the International Energy Agency, during a CERAWeek panel discussion later in the day.
“Maybe the growth is slowing down, but no peak.”
Opec secretary-general Mohammad Barkindo at the same meeting said he doesn’t believe a peak will occur in the “foreseeable future.”
Assumptions that demand will stop growing or even atrophy could discourage investment in new oil exploration projects, crimping future supplies and triggering price shocks that would endanger economic growth, Al Falih said.
The statements follow comments by Royal Dutch Shell’s chief financial officer Simon Henry on March 2 that demand for oil could peak in as little as five years, a rare statement in an industry that commonly forecasts decades of growth.
Even as the costs of renewable energy sources decline and alternatives grab an every-bigger share of the pie, climate change concerns and technological advances won’t be enough to sideline crude oil, Al Falih said.