Saudi Arabia’s energy minister said on Monday that oil markets could face a dangerous period as reduced investments in exploration and drilling threaten to cut crude production by 30 million barrels per day by 2030.
Prince Abdulaziz bin Salman al-Saud, speaking at a budget conference in Riyadh, also said that top oil exporter Saudi Arabia would be one of the few countries that could raise its oil production capacity in 2022.
“We are set for a period that could be dangerous. If there isn’t more spending on investments to preserve production capacity and increase it, an energy crisis is coming to the world,” Prince Abdulaziz said.
“In a way or another, I am not predicting, but I am warning that spare production capacity will disappear.”
Spare capacity is an important buffer for the oil market as it allows producers to quickly respond to unplanned outages that could tighten the market and cause big fluctuations in prices.
Consumers in Asia and Europe this year have faced shortages of natural gas, coal and power due to production declines that pushed prices to multiyear highs.
Oil producers have stressed the continued importance of hydrocarbons for energy security in the transition from fossil fuels to renewables as part of global efforts to combat climate change.
Saudi Arabia plans to invest 380 billion riyals ($101.30 billion) in renewable energy projects and a further 142 billion riyals in energy distribution through 2030, the minister said. ($1 = 3.7513 riyals)
(Reporting by Yousef Saba and Aziz El Yaakoubi in Riyadh Writing by Ghaida Ghantous Editing by Gareth Jones and Matthew Lewis)
