Aramco CEO says Ukraine invasion has accelerated global energy crisis

HOUSTON, March 8: Executives at a US energy conference are set to turn their focus on Tuesday to renewables and the long-term shift away from fossil fuels, even as the West seeks immediate replacements for Russian oil and gas supplies after Moscow’s invasion of Ukraine, according to Reuters

The CERAWeek energy conference on Houston opened on Monday with crude prices at levels not seen since 2008, putting the focus on how to reduce reliance on Russia, a top global exporter of oil and gas which now faces ever tighter Western sanctions.

The United States, which has held talks with allies on banning Russian oil imports, is expected to announce it will go ahead with such a step without Europe, sources said. US retail gasoline prices hit a new record early Tuesday, and Brent crude was lately at $129 a barrel.

Tuesday’s panels at CERAWEEK, which was due to focus on the energy transition, feature discussions about renewable energy and electric vehicles, which still make up a small percentage of the world’s auto fleet although production is rising fast.

Saudi Aramco Chief Executive Amin Nasser is expected to speak, although it is unclear if he will address global crude supply concerns.

Saudi Arabia, the world’s biggest crude exporter, is the de facto leader of the Organization of the Petroleum Exporting Countries which has an alliance with Russia and others. The group known as OPEC+ has been gradually unwinding output cuts.

Washington and other consumers have been pressing for faster output increases by OPEC+, but the group has limited spare capacity to produce more and some OPEC+ members are already struggling to hit existing production quotas.

OPEC Secretary General Mohammad Barkindo said geopolitics was dominating oil price moves and, although a tight market was creating some demand destruction, “the other side of the equation is probably more critical at the moment, which is supply is increasingly lagging behind.”

OPEC officials met US shale oil company executives on the conference sidelines on Monday.
Some buyers have shunned Russian oil and gas exports to avoid becoming entangled in sanctions, creating a major supply disruption. Russia exports 4 million to 5 million barrels per day of crude and 2 million to 3 million bpd of products.

Advocates of renewables say Russia’s invasion of Ukraine should spur on the transition to cleaner fuels and say more oil and gas investment, under any circumstances, would increase reliance on fossil fuels and speed up climate change.