Riyadh, Saudi Arabia–Rising interest rates across the globe, a measure taken by central banks to curb inflation, have affected the demand for oil, said Amin Nasser, CEO of Saudi Aramco.
As the world emerged from Covid-19 pandemic, there was a surge in the demand but the rising interest rates have slowed it down, Nasser said at the ongoing sixth edition of the Future Investment Initiative that began on Tuesday.
Nasser said the world needs an optimal and realistic energy transition plan.
“The current transition plan isn’t working. We are still dependent on coal. We need to have a new consensus on the transition to renewable,” Nasser added.
He said Saudi Aramco was working on technologies to reduce carbon emissions and also blue carbon technology, which will require a lot of investment.
On the first day of the summit, hailed as Davos of Desert, Saudi energy minister Prince Abdulaziz bin Salman blasted the release of emergency oil stocks as an attempt to “manipulate markets”, the latest apparent salvo in a spat with Washington over oil production.
“People are depleting their emergency stocks, had depleted it, used it as a mechanism to manipulate markets while its profound purpose was to mitigate the shortage of supply,” Prince Abdulaziz bin Salman said during a session.
Lord Adair Turner, chair of the Energy Transitions Commission, said Europe was burning more coal this year as it is shot of gas, but transformation towards renewable energy is in progress.
“We at the Energy Transition Commission think 60 percent future electricity will be produced by nuclear energy and renewables. We see role for biofuels but the heavy lifting will be done by renewables,” said Turner and added that China is building renewable at an extraordinary pace.
“There is revolution going on in solar energy. UK is trasitioning towards it. The US will also achieve commitments made at Glasgow,” Turner said.
Saudi Finance Minister Mohammed Al Jadaan said there is more thinking about renewable energy and a realization that the transition to renewables is not going to take place soon.
“World is going through a very difficult time. We need cooperation and collaboration. We need microfinance to revive the economy,” Al Jadaan said.
Former US treasury secretary Steven Munchin said the world has to come together, like it did during Covid crisis, for energy transformation.
“Energy security is also part of national security,” Munchin said.