The world\u2019s biggest oil company is confident demand will pick up strongly this year as China reopens its economy and the aviation market recovers.
\n\u201cWe are very optimistic in terms of demand coming back to the market,\u201d Saudi Aramco\u2019s chief executive officer, Amin Nasser, said in an interview. \u201cWe are starting to see good signs coming out of China. Hopefully, in the next couple of months, we\u2019ll see more of a pickup in the economy there.\u201d
\nDemand for jet fuel is now around 1mn barrels a day below pre-pandemic levels, according to Nasser, roughly half the figure from a year ago. \u201cIt\u2019s picking up,\u201d he said at the World Economic Forum in Davos.
\nOil prices whipsawed in 2022. Brent crude surged to almost $130 a barrel in the wake of Russia\u2019s attack on Ukraine, but slumped in recent months as the Chinese, US and European economies slowed. It\u2019s trading at about $86.80 a barrel, up 1% since the end of December.
\nMany Wall Street banks, including Goldman Sachs Group Inc, expect it to climb above $100 a barrel in the second half of the year. They cite a global economic rebound by that time, low fuel stockpiles in nations such as the US and the potential for Russian exports to drop as the west tightens sanctions.
\nNasser reiterated that companies need to invest more in oil production. Idle capacity stands at 2mn barrels a day, barely above total demand of 100mn barrels, and will probably drop as China ends its coronavirus lockdowns, he said.
\nThe world needs 4-6mn barrels a day of new production just to make up for the natural decline in existing fields, according to the CEO.
\n\u201cWe\u2019re moving into the situation where we\u2019re eroding spare capacity and any supply interruptions will have a huge impact,\u201d he said.
\n\u201cWe will be in a situation similar to natural gas,\u201d he said, referring to how prices for the fuel jumped to the equivalent of $250 a barrel after Russia\u2019s invasion.
\nThe Saudi Arabian state-controlled company sees oil demand continuing to grow for the rest of the decade, even as electric vehicles become more popular and investors pour money into renewable energy.
\n\u201cIt\u2019s offsetting some of the demand\u201d for oil, said the CEO. Still, crude consumption will \u201cdefinitely\u201d be higher in 2030.
\nThe increasing use of petrochemicals \u2014 feedstocks for everything from plastics to fertilisers and clothes \u2014 is positive for Aramco, he said.
\nThe company wants to convert 4mn barrels a day of crude into petrochemicals by the end of the decade. It\u2019s looking at more investments in Chinese refineries and liquid-to-chemical plants as part of that push, said Nasser.
\n\u201cWe\u2019re in serious discussions with so many entities\u201d in China, he said.
\nLast year, Aramco and its chemicals subsidiary, Sabic, said they were planning to build a 320,000 barrels-per-day refinery at Gulei, a coastal Chinese town.
\nAramco is also investing billions of dollars in hydrogen, a fuel seen as crucial to the transition to cleaner forms of energy. The Saudi firm aims to export blue hydrogen, made by converting natural gas and capturing the carbon dioxide emitted in the process, on a large scale from about 2030.
\nTalks with potential importers in Japan and South Korea are progressing, though they\u2019ll probably need to get assurances of financial support from their governments before they sign any supply contracts, Nasser said.
\n\u201cThey think they\u2019ll be able to do it in 2023,\u201d he said. \u201cWe\u2019ll see.\u201d
\nBlue hydrogen may end up costing the equivalent of around $250 a barrel of oil, Nasser said, though Aramco won\u2019t know until it\u2019s done more research.
\n\u201cIt\u2019s not going to be $80 or $100\u201d a barrel, he said. \u201cThis is cleaner \u2014 it costs more.\u201d
\nNegotiations with European firms are proving tougher, primarily because they want to wait for technological advances to bring down the price of blue hydrogen.<\/p>\n","protected":false},"excerpt":{"rendered":"
The world\u2019s biggest oil company is confident demand will pick up strongly this year as China reopens its economy and the aviation market recovers. \u201cWe are very optimistic in terms of demand…<\/p>\n","protected":false},"author":1,"featured_media":6542,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[40,46,48,50,57,68,76,77,78,79,80,82,86,87,88,90,95,96,98,99,103,107,109,111,112,114,121,123,137,139,146,148,153,159,174,176,181,182,184,187,196,201,202,203,209,217,221,222,229,231,232,233,239,241,244,246,249,250,251,252,256,262,263,266,268,277,279,280,283,285,288,300],"class_list":["post-6541","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oil-gas","tag-alleviation","tag-aramco","tag-athens","tag-athensenergydialogues","tag-baroudi","tag-carbon","tag-climate","tag-climate-change","tag-climateaction","tag-climatechange","tag-closure-of-nuclear","tag-co2","tag-cyprus","tag-decarbonising","tag-decarbonization","tag-democracy","tag-disputes","tag-doha","tag-east","tag-eastmed","tag-egypt","tag-embargo","tag-emissions","tag-energy","tag-energy-market","tag-energyindustry","tag-europe","tag-european-fuels","tag-gas","tag-gazprom","tag-greece","tag-greenenergy","tag-hydrocarbons","tag-international","tag-lebanon","tag-liquefied-natural-gas","tag-maritime","tag-maritime-boundaries","tag-maritime-disputes","tag-mediterranean","tag-natural-gas","tag-offshore","tag-oil","tag-oil-and-gas","tag-opec","tag-peace","tag-plants","tag-pollution","tag-poverty","tag-power","tag-putin","tag-qatar","tag-renewable-energy","tag-reserves","tag-rosneft","tag-roudi","tag-russia","tag-russia-in-the-european-energy-sector","tag-russian-gas","tag-russian-sanctions","tag-saudi","tag-solar","tag-solar-power","tag-straddling","tag-sustainability","tag-total","tag-trump","tag-turkey","tag-ukrain","tag-unclos","tag-usa","tag-300"],"_links":{"self":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/6541","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6541"}],"version-history":[{"count":0,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/posts\/6541\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=\/wp\/v2\/media\/6542"}],"wp:attachment":[{"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6541"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6541"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/emimer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6541"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}