An excess of supply in the oil market was the main reason for OPEC+ opting to cut production earlier this month, according to the group’s secretary-general.
He spoke at Abu Dhabi’s Adipec energy conference, shortly after Vitol Group, the world’s biggest independent crude trader, warned that demand’s dropping and will continue to do so for several months.
“It remains difficult for many countries” after the surge in prices this year, Chief Executive Officer Russell Hardy said in an interview with Bloomberg Television.
India’s oil minister said higher crude prices would only serve to accelerate the transition to cleaner energy and worsen any global recession.
“If you raise the price from here, the only response is that the recession will be deeper and prolonged,” Hardeep Singh Puri said. “It’s in their interest not to let it go beyond” current levels, he said, referring to producers.
Meanwhile, Amos Hochstein, President Joe Biden’s special envoy for energy, said US companies’ investment in new energy supply is “just not enough.”
The world’s biggest oil and gas companies and energy ministers from Saudi Arabia, the United Arab Emirates and India are meeting in Abu Dhabi this week. Running from Oct. 31 to Nov. 3, Adipec comes in the wake of OPEC+’s decision to reduce output, a move that led to fierce criticism from the US. Oil prices have climbed in the past two weeks, with Brent trading above $95 a barrel.
Delegates are also likely to discuss what the energy transition means for Middle Eastern petrostates and what they hope will come out of next month’s COP27 climate conference in Egypt.