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13 Mar 2024

Oil Security: vital for all

Vienna, Austria, 13 March 2024--We took note of the International Energy Agency (IEA) reaffirming the significance of oil security to energy transitions in its most recent commentary: ‘A strong focus on oil security will be critical throughout the clean energy transition’.

At OPEC, we are encouraged by this message and the reference to the continuing importance of oil to the world. The IEA says in its commentary: “An enduring focus on oil security is a consequence of the continued need for oil to fuel cars, trucks, ships and aircraft, as well as to produce the petrochemicals necessary to manufacture countless everyday items”.

These messages have been strongly voiced by OPEC for many years, and we will continue to reiterate that energy security, energy affordability and reducing emissions need to go hand-in-hand, as we look to an all-energies, all-technologies and all-peoples approach to energy transitions.

The IEA’s commentary also underlines a number of other critical points.

It notes that “investment uncertainty raises the risk of a supply-demand imbalance” and talks of how this can leave “oil companies facing difficult and commercially risky decisions.” This is true, but it is important to stress that the IEA’s talk of the need for no new oil and natural gas fields in its net zero pathway has contributed significantly to this uncertainty, which has the potential to lead to major energy chaos, not the desired energy security.

It highlights that oil supply security is threatened by an array of additional factors, such as geopolitics, extreme weather events and cyber-attacks. It is important to stress that these factors have the potential to affect all energies, as well as all economic sectors. The oil sector is not isolated in this regard.

It also references “the emerging security dimensions of clean energy transitions, such as critical mineral supplies.” Critical mineral supply chains will also come under pressure in the IEA’s net zero pathway, given that the IEA says a typical electric vehicle needs six times the mineral inputs of a conventional car.

It is incumbent on all industry stakeholders to focus on and contribute to oil security, in all facets, given the immense benefits that oil, and the petroleum products derived from it, continue to provide to people and nations across the world.

OPEC has consistently reaffirmed its commitment to oil market stability and security of supply, including through its Members holding spare capacity at their own cost in case of any unforeseen global oil supply disruptions. We have also underscored how underinvestment in the industry could imperil that security. The stakes are high. This warrants clear and consistent messaging from all energy stakeholders on how vital oil and energy security is for the health of the global economy and the welfare of billions around the world.