World may face energy crisis unless spending is raised, says energy minister

Prince Abdulaziz bin Salman, Saudi Minister of Energy

The world is about to face an energy crisis unless investment expenditure is increased to maintain and increase production capacity, said Prince Abdulaziz bin Salman, Saudi Minister of Energy, noting that there is a state of blurriness to convince everyone of uncertainty in the sector.

About 65% of spending is related to maintaining production capacity levels rather than increasing these levels. Accordingly, any drop below this level will cause a shortage in the current supplies.

Saudi Arabia was the only state that boosted its output in April 2020 amid the pandemic, Prince Abdulaziz said, pointing out that the investment initiative was better than the hesitation of peers due to uncertainty.

Oil will account for 28% to 30% of global energy demand by 2045. Global demand for energy will almost double from the current level, the Saudi minister added during the Saudi Budget Forum 2022 held today, Dec. 13.

If investment in the exploration industry is suspended as urged by the International Energy Agency (IEA) and some other parties, oil output may drop by nearly 30 million barrels in 2030.

He added that these factors look worrying but reassuring. "What is said about 2030 and 2050 is exaggerated and will not be achieved. This is the most important message I want to convey to citizens. there is a state of blurriness to convince us of uncertainty in the sector.”

Even if the global demand decreased, supply will be lower from many countries, which means that the contribution of Saudi Arabia, OPEC and OPEC+ will see an increase.

“We should trust our capacities, and disregard messages that impact our balance and hinder our improvement,” the Saudi minister concluded.