A senior official from Saudi Aramco has said that it is not just down to Saudi Arabia to ensure future oil supplies by investing in its infrastructure and that low oil prices could cause a future price spike.
Speaking at a conference in China, Mohammed Madi, chief representative for Saudi Petroleum Limited in Beijing, said that he believes if other nations do not follow Saudi Arabia’s lead then the industry could experience another price spike like that experienced in 2008 when oil hit US$147 a barrel.
“Our industry may already be sowing the seeds for future problems. Meeting future growth in demand for oil will not simply happen because we wish it to be so, nor is our collective ability to bring substantial new supplies to market a given,” Madi said.
“We must recognize that depressed oil prices are not only detrimental to the economies of petroleum producing nations but also to the interests of consuming countries. That may seem counterintuitive, but consider that sustained and timely investments in petroleum projects and infrastructure are essential to maintaining future supplies at adequate levels.”
“Current oil prices do little to encourage the necessary massive investments, and without them we may experience supply shortages once demand picks up in the future,” he added.
Madi also said that the industry can ensure that it avoids such a scenario through creating conditions for stability, reliability and predictability.
