“I am a dinosaur, but I have never seen these things,” Saudi minister Prince Abdulaziz bin Salman, who’s been attending OPEC meetings since the 1980s, said Tuesday at a conference in Abu Dhabi, referring to the recent surge in prices for refined products. “The world needs to wake up to an existing reality. The world is running out of energy capacity at all levels.”
The comments came in the same week that retail U.S. gasoline prices rose to a record. The minister made similar remarks on Monday, saying that a lack of investment in energy production and refining was leading to costlier fuel.
The prince’s UAE counterpart, Suhail al Mazrouei, said on the same panel that without more investment across the globe, OPEC+ wouldn’t be able to guarantee sufficient supplies of oil when demand fully recovers from the coronavirus pandemic.
Saudi Arabia and the UAE are among the few producers investing in greater output. They’re spending billion of dollars to raise their crude capacity by 2 million barrels a day between them by the end of this decade. Most others are struggling to get funding as shareholders and governments encourage a shift from fossil fuels to renewable energy.
Still, for now there’s no shortage of oil and thus no need for OPEC+ to accelerate its gradual production increases, according to Mazrouei.
“The market is balanced,” he said.
The Organization of Petroleum Exporting Countries and its partners, a 23-nation group led by the Saudis and Russia, has been under pressure from the U.S., Europe and other major importers to boost supply more quickly.
Crude has jumped more than 35% this year to around $105 a barrel, mostly due to Russia’s attack. The European Union is moving closer to a formal ban on Russian energy imports in a bid to punish Moscow for the war.
OPEC+ rubber-stamped a 432,000 barrel-a-day increase for June at its last meeting on May 5. It’s struggling to reach even that modest monthly target, with many members pumping below their quotas.
Prince Abdulaziz reiterated that OPEC+ would not allow geopolitics to affect its decisions. The U.S. has tried to get Saudi Arabia and the UAE to distance themselves from Russia since the attack on Ukraine.
Mazrouei said prices had been pushed up by the “politicization” of the oil market.