Politicians, lawmakers and underinvestment in the oil and gas sector are to blame for high energy prices, not OPEC, the group’s secretary-general, Haitham Al Ghais, told Reuters on Thursday.
The lack of investment in the oil and gas sector following the drop in prices caused by COVID-19 has significantly reduced the spare production capacity of the OPEC and their ability to respond quickly to possible new supply interruptions.
The price of benchmark Brent came close to hitting an all-time high of $147 a barrel in March, after the Russian invasion of Ukraine exacerbated supply concerns. While prices have fallen since then, they remain painfully high for consumers and businesses globally.
“Don’t blame the OPECblame your own politicians and legislators, because the OPEC and producing countries have repeatedly pushed for investment in oil (and gas)Al-Ghais said.
Investment in oil and gas is up 10% from last year but remains well below 2019 levels, the International Energy Agency said last month.IEA), who added that some of the immediate deficits in Russian exports must be covered by other production.
The new Secretary General of the OPEC also pointed to the lack of investment in the refining sector, adding that members of the OPEC they have increased their capacity to balance the decline in Europe and the United States.
“We are not saying that the world will always live on fossil fuels (…) but by saying that we will not invest in fossil fuels (…) you are going from point A to point B overnightAl-Ghais said.
The OPEC exists to ensure the world has enough oil, but “it is going to be very challenging and very difficult if the importance of investing is not accepted”, he said, adding that he hopes that “investors, financial institutions, policymakers, as well as globally, take this matter seriously and factor it into their plans.”