July 28, 2022 at 9:15 am,
Updated on July 28, 2022 at 4:25 pm
Reading time: 4 minutes
World of Energy
The information is commented on less than “ find out » trade between Joe Biden and Mohammed bin Salman. However, it is more important for humanity’s energy future. During his meeting with the US President on July 16, the Crown Prince of Saudi Arabia announced that the country’s oil production should increase – that is, flat, before gradually decreasing – by 13 million barrels per day. When this level is reached, the kingdom “ does not have the capacity to further increase its production »said the prince in a speech.
The announced threshold should be reached in 2027, according to a recent statement by the Minister of Energy. This is lower than what Saudi Arabia once thought it could do. In 2004, the national oil company Saudi Aramco pledged an American think tank and advisory center, the Center for Strategic and International Studies (Center for Strategic and International Studies), that it can produce 10 to 15 million barrels per day “ at least until 2054 ».
100 million barrels per day
Mohammed bin Salman’s surprise statement raises questions, in a context where the demand for oil continues to increase. About 100 million barrels are consumed every day worldwide. From the industrial sector to chemicals, through transportation, our societies remain dependent on oil, a reality “ blood » in the world economy. Without rapid and sustained decarbonization efforts, demand is expected to reach 104 million barrels by 2026, according to forecasts by the International Energy Agency (OUCH).
Saudi Arabia plays an important role in supplying the world with black gold. The country is the second largest oil producer in the world, after the United States. In 2021, its production reached 10.7 million barrels per day (Mb/d). It also has the largest reserves of conventional oil on the planet.
- An oil field operated by Aramco in 1981. Public domain/Ray Stevens via Wikimedia Commons
In a column for Bloomberg, journalist and energy specialist Javier Blas puts forward two hypotheses on the factors that may have prompted the kingdom to change its ambitions. The country can expect a decrease in demand due to the fight against climate change, and will therefore be reluctant to invest billions in improving its production. But this explanation seems unlikely, the prince presents this standard as “ irrevocable ». “ If money is not the obstacle, it must be geology »thought the reporter.
The kingdom is struggling to find oil fields in abundance enough to compensate for the decline of its aging fields. Prince Mohammed bin Salman’s announcement may reflect his concern about his ability to profitably increase production. “ If it is geology, and not some form of pessimism about the future of oil demand, that is holding back Saudi production growth, the world could be in a tough spot if consumption is stronger than it is. »warned the reporter.
Without an increase in Saudi production, “ it is doubtful that the global supply of oil will support the continued increase in demand in the coming yearscommented on Twitter energy specialist Maxence Cordiez, head of European public affairs at the Commissariat for Atomic Energy and Alternative Energies (ECA). One might wonder if Saudi Arabia […] even able to reach 13 Mb/d in 2027 and continue this production. »
The mundane scene is hardly reassuring. Half of the current oil production comes from the fields “ adults », and is therefore set to decline over the next few years. Many oil-producing countries – such as Algeria, Nigeria or Angola – have already seen their production decline for several years, while others – such as Russia – are expected to decrease during 2020. So far the most optimistic projections, for example that of the economic intelligence company Rystad Energy, indicate an inevitable peak in oil production, due to the lack of sufficient reserves, during the 2030s at the latest.
For Javier Blas as well as for Maxence Cordiez, the announcement of Mohammed ben Salmane offers more reason to decarbonize our economy. “ In view of the decreasing supply, we can adjust our demand in a voluntary and planned way, or it must be adjusted in a forced price way. », judging the French engineer. This last option, he explained, promises to be possible “ economic pain, especially in the most moderate “.