Saudi Arabia’s energy minister Prince Abdulaziz bin Salman al-Saud said on Monday that oil markets could face a dangerous period marked by undersupply and volatility if the world reduces investments in exploration and drilling, according to reports.
The comments, made at a budget conference in Riyadh, amount to a warning shot at efforts to slash new production capacity while the world begins a decades-long energy transition in the face of climate change threats. Prince Abdulaziz said reduced investments in exploration and drilling threaten to cut crude production by 30 million barrels per day by 2030, Reuters reports.
Prince Abdulaziz bin Salman arrives at a new solar project in Saudi Arabia.
“We are set for a period that could be dangerous. If there isn’t more spending on investments to preserve production capacity and increase it, an energy crisis is coming to the world,” Prince Abdulaziz said. “In a way or another, I am not predicting, but I am warning that spare production capacity will disappear.”
As Bloomberg notes, the International Energy Agency has called for the cessation of new investment in fossil fuels if the world is to neutralize carbon emissions by 2050.
Although Saudi Arabia is seeking to increase its production capacity to 13 million barrels a day from 12 million by 2027, the Kingdom is also increasing investments in renewable and green energy projects. Saudi Arabia plans to invest 380 billion riyals ($101.30 billion) in renewable energy projects and an additional 142 billion riyals ($37.86 billion) in energy distribution through 2030, the minister said.
