The energy ministers of Saudi Arabia and the United Arab Emirates warned that spare capacity is decreasing in all energy sectors as producers slash investment, causing everything from crude to diesel and natural gas to trade at or near record highs.
“I have a lot of experience, but I've never seen these things before,” said Saudi Energy Minister Prince Abdulaziz bin Salman about soaring prices of refined oil products.
“The world needs to wake up to a reality... All energy production capabilities are being implemented at all levels,” added the minister during the World Utilities Congress in Abu Dhabi.
Prince Abdulaziz pointed out that there was a wide gap between prices of crude oil and that of jet fuel, diesel, and gasoline because of lack of investment in refining capacity.
He stressed that the focus on high oil prices and not on the high cost of gasoline and diesel, for example, is surprising.
Prince Abdulaziz added that the Ukrainian crisis is a matter of Europe and Russia, explaining that OPEC leaves politics outside its meetings.
Prince Abdulaziz expressed concern about the sustainability of the energy system all together.
“We need a sustainable energy system to enable us rather than inhibit us from reaching our own prosperity and sustainability targets,” he stressed during the ministerial session.
For his part, UAE Energy Minister Suhail Al-Mazrouei said that without pumping more investments around the world, the OPEC+ alliance will not be able to ensure the availability of sufficient supplies of oil when demand fully recovers from the repercussions of the coronavirus pandemic.
Al-Mazrouei said that the fluctuations of the oil market are related to factors outside the framework of the OPEC+ oil producers’ alliance.
These factors included that some buyers boycotted certain suppliers, indicating that the high volatility is not due to supply and demand, but rather because some do not want to buy certain raw materials and traders take time to move from one market to another.