Saudi Aramco CEO calls on a reset in energy policies for developing countries

The head of Saudi Aramco, who called for a reset to policies in developing countries, said that progress in Asia's energy transition is slower, less equitable, and more complex than many had expected.

Aramco CEO Amin Nasser said that even with the transition as economies expand and standards of living rise, the Global South will likely see significant growth in the oil demand for a very long time. While this growth will eventually stop, it is likely that a plateau is to follow.

In a speech delivered at the Singapore International Energy Week, he stated that "if so, then more than 100,000,000 barrels of oil per day will be needed by 2050".

This is in stark contrast to those who predict that oil production will or must fall below 25 million barrels a day by the year 2020. It would be disastrous for energy affordability and security to have 75 million barrels of oil per day.

Nasser stated that countries should select an energy mix which helps them achieve their climate ambitions in a way and speed that suits them. "Our focus should be on levers that are available today."

They include encouraging investment in oil and natural gas that developing countries need and can afford. Prioritising the reductions of carbon emissions from conventional sources through energy efficiency improvements and development of carbon capture, utilization and storage (CCUS) are also included.

He said that despite trillions of dollars invested in global energy transformation, oil and coal consumption are at an all-time high, dealing "a hammer blow" on energy transition plans.

Asia, the continent that consumes more than half of all energy in the world, relies 84% on conventional energy sources. He said that alternative energy sources are largely meeting the growth in consumption, rather than replacing conventional energy.

He said that the shift from gasoline to electric vehicles in Asia, Africa, and Latin America lags behind China, Europe, and the United States, as consumers are concerned about affordability and infrastructure.

Nasser stated that the progress of EVs does not have any impact on the remaining 75% of oil demand in the world, since segments such as heavy transportation and petrochemicals are unable to find economically viable alternatives.

Nasser said that developing countries could need to spend almost $6 trillion a year on funding the energy transition. He also called for a stronger voice in climate policy.

The world is suffering the consequences of not taking into account the voice and priorities of Asia, as well as the Global South.

(source: Reuters)