EMEA News
Saudis Talk Up Demand as Even Big Oil Eyes the End of the Crude Era
The seemingly endless media attention paid to renewable fuels has convinced some observers that the end of the oil era is nigh, but not as far as Saudi Arabia is concerned: it thinks global demand for oil with grow by 45 percent by 2050.
Khalid al-Falih, that country's energy minister, also stated at a conference in Riyadh that his kingdom will remain a cornerstone of the international oil industry via state-owned Saudi Aramco.
In fact, with as much as $1 trillion in investments having been delayed or cancelled due to the low crude prices of the past few years, Amin Nasser, the chief executive of Aramco, warned that a supply crunch could soon result; he added that "it will be decades before renewable energy takes a major share in the energy mix."
Nasser even went so far as to claim he wasn't worried at all about the future growth of U.S. shale: he said the market can absorb the increase, given forecasts that global oil demand will grow by 1.6 million barrels per day in 2017.
The notion of a far hardier than expected demand for crude seems to be shared by the International Energy Agency, which has calculated that despite the number of electric vehicles growing to more than 2 million in 2016 (up nearly 60 percent from 2015), they only make up about 0.2 percent of all cars on the road.
The IEA predicts that by 2030 the electric fleet could grow to 160 million - but Nasser estimated that by that time there will be 2 billion vehicles overall.
Saudi Arabia's pro-crude stance aside, clean energy continues to capture the imagination of investors: Bloomberg reports that the world's biggest oil companies are closing more clean energy deals as pressure to diversify their businesses mounts, with $6.2 billion having been spent to date to acquire stakes in so called `green' firms.
For his part, Anthony Grisanti, founder and president of GRZ ENERGY, isn't swayed by the Saudis' stance in Riyadh: in a CNBC editorial he pointed out that General Motors, Volvo, and Mercedes "have all announced plans to phase out gasoline powered cars; the alternative energy market is growing rapidly as natural gas, wind and solar replace oil."
And with regards to the highly publicized push by the Saudis to stage an Initial Public Offering of Aramco, Grisanti stated, "I would compare buying the Aramco IPO to buying a Blockbuster video franchise in the age of Netflix; the timing is all wrong."
Earlier this month, the Organization of the Petroleum Exporting Countries (OPEC) - which has repeatedly forecast that alternative energy will one day replace crude - stated that there is "no peak" for oil demand for "the considerable future."
