Saudi Arabia, Bahrain sign MoUs to boost transportation cooperation

Jeddah - Yasmine El Tohamy - RIYADH: Calls for completely abandoning oil and fully relying on renewable energy have been deemed “wrong” and “unrealistic” by Haitham Al-Ghais, the secretary-general of the Organization of the Petroleum Exporting Countries.

“If oil disappeared, this would also affect the production of renewable energy, such as manufacturing of wind turbines and solar panels, as their production is linked to oil products,” Al-Ghais said.

In an interview with the Kuwait News Agency, he emphasized that oil, which currently constitutes 31 percent of the global energy mix, remains the “lifeblood of modern life” and is expected to maintain its crucial role in international markets for decades to come.

Furthermore, he pointed out the advantages of oil in terms of extraction, refining, and transportation processes.

These attributes have solidified oil’s pivotal status since its discovery and its ongoing vital contribution to the global economy, the secretary-general explained.

Al-Ghais elaborated on the integral role of oil in various essential daily activities worldwide, including transportation, travel, energy production, and manufacturing.

He highlighted the challenges associated with completely abandoning oil, given its significant presence in human life across diverse locations, nationalities and professions.

Last week, Aramco President and CEO Amin H. Nasser also emphasized the need for a new, realistic pathway for the energy transition that includes oil and gas.

Speaking at CERAWeek 2024 in Houston, Texas, Nasser said the current transition strategy “is visibly failing on most fronts as it collides with five hard realities.”

“Despite the world investing more than $9.5 trillion on energy transition over the past two decades, alternatives have been unable to displace hydrocarbons at scale… Global oil demand is expected to reach an all-time high in the second half of this year. Likewise, gas remains a mainstay of global energy, growing by about almost 70 percent since the start of the century. All this strengthens the view that peak oil and gas is unlikely for some time to come,” the Aramco chief said.

He called for abandoning “the fantasy of phasing out oil and gas” and stressed the need “to invest in them adequately”

“We should ramp up our efforts to reduce carbon emissions, aggressively improve efficiency, and introduce lower carbon solutions. And we should phase in new energy sources and technologies when they are genuinely ready, economically competitive, and with the right infrastructure.”

The Organization of the Petroleum Exporting Countries expects strong growth in global oil demand in 2024 and 2025 driven by robust economic activities in China. 

The oil producers’ group said world oil demand will rise by 2.25 million barrels per day in 2024 and by 1.85 million bpd in 2025.

“Continued robust economic activity in China, global air travel recovery and expected healthy petrochemical feedstock requirements will be key for oil demand growth in 2024,” OPEC said in a recent report. 

According to OPEC, ongoing improvements in airline activities, combined with robust road mobility are expected to support the demand for jet oil, kerosene and gasoline in 2024 among 38 member countries in the Organisation for Economic Co-operation and Development. 

The report revealed that oil demand grew by a considerable 2.5 million bpd in 2023, driven by solid economic activity in non-OECD countries, led by a strong rebound from COVID-19-related lockdowns in China.