Saudi Aramco can sustain its oil production at its maximum capacity of 12 million barrels per day (bpd) for a year without additional investments, Amin Nasser, the chief executive of the Saudi state oil giant said at the Energy Intelligence Forum in London on Monday.
Concerns have emerged among analysts in recent weeks that the reversal of the OPEC+ cuts leaves the declining spare capacity vulnerable to supply shocks. Saudi Arabia holds the world’s biggest spare capacity. It is estimated at more than 2 million bpd, but it may actually be as low as between 600,000 bpd and 1 million bpd that can be brought up quickly and sustained for a period of time, according to estimates by Reuters’ energy columnist Ron Bousso.
Saudi Arabia and its state oil firm, the world’s biggest oil company, expect global oil demand to continue growing, Nasser said at the forum.
The Saudis have bullish demand forecasts for both this year and next. Aramco’s Nasser expects the world’s oil demand to increase by between 1.1 million bpd and 1.3 million bpd in 2025, and by another 1.2 million bpd to 1.4 million bpd next year.
In a speech at the Energy Intelligence Forum, Nasser said the energy “transition hype has not been matched by reality on the ground.”
“While the icons of transition are still clearly stuck in first gear, hydrocarbons are largely carrying the extra load, and they remain the backbone of global energy and the most reliable engine of prosperity,” Aramco’s CEO added, noting that “in reality, this is not a true energy transition; it’s an energy addition which requires all hands on deck.”
As Aramco’s strategy reflects the realistic outlook, “We are determined to remain dominant in oil thanks to a massive resource base, low costs, and one of the lowest upstream carbon intensities across the industry,” Nasser said.
“We also see resilient demand, and the pressing need for long-term investments in supply is now widely accepted. So, our growth potential in oil remains large.”
By Michael Kern for Oilprice.com
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