VIENNA, Austria – On March 7, 2017, at CERAWeek, the executive director emphasized the importance of the oil industry’s future, stating, “invest, invest, invest.”
“We advocate that investments need to be made without delay, particularly in the upstream sector,” he added.
The collaboration between OPEC and the IEA’s stance continued to gain traction, highlighted in an article released alongside the 16th International Energy Forum Ministerial Meeting on April 10, 2018. The executive director noted:
“Timely investment in oil and gas supply is essential for energy security, regardless of climate policy.”
By May 2021, however, the IEA revised its position. In the launch of the ‘Net Zero by 2050: A Roadmap for the Global Energy Sector’ report on May 11, the agency stated:
“No new investment in fossil fuel supply is needed for our net-zero pathway.”
In an interview on May 18, 2021, the executive director reiterated:
“For governments to be serious about the climate crisis, no new investments in oil, gas, and coal should occur starting this year.”
“It’s crucial to acknowledge the need for investment to address declines in existing fields. We require upstream investments in oil and gas, full stop.”
This significant shift raises concerns about the long-term stability of the oil industry. Clear communication regarding future supply and demand is vital. Agencies responsible for long-term industry analysis must avoid fluctuating positions, particularly those focused on ensuring oil supply security.
OPEC has consistently asserted that investments are vital for the oil industry’s sustainability. Insufficient investments could jeopardize future energy security, disrupt supply-and-demand fundamentals, and impact energy affordability, leading to detrimental effects for consumers and producers alike.
Industry investment needs are vast. OPEC projects that cumulative investments of $17.4 trillion will be necessary by 2050 to meet rising demand and combat decline rates, which necessitate an additional 5 mb/d each year just to maintain current supply levels.
Consequently, OPEC has continually advocated for increased investments in the oil sector. Their efforts, particularly under the ‘Declaration of Cooperation,’ aim to foster an environment conducive to investment. This requires stable oil markets, which remains a top priority based on comprehensive analysis grounded in reality.
The implications of the IEA’s 2021-2024 investment halt in the oil sector remain to be seen. A return to realistic energy analysis and a commitment to energy security would benefit all stakeholders, with OPEC positioned as an eager partner.
