H.E. Jamal Essa Al Loughani, Secretary-General of the Organization of Arab Petroleum Exporting Countries (OAPEC), talks to The Energy Year about energy security, diversification of petrochemicals output and trade flows and the organisation’s growing emphasis on sustainable technologies. OAPEC is the Kuwait-based intergovernmental organisation that co-ordinates energy policy among Arab oil-producing countries.
Given the expected rise in global oil demand, how is OAPEC assisting its member countries in boosting investment in their oil and gas sectors?
We constantly stress the importance of enhancing investments in the oil industry to avoid jeopardising global energy security and the transition to a clean and sustainable energy system. A shortage of investment in new projects, particularly in exploration and production, reduces the growth and development of new oil reserves, thus restricting supply at a time of rising demand and driving energy prices higher.
This situation places a significant responsibility on member countries to invest in energy security and meet the expected 0.7% annual growth of oil demand until 2050. Oil will continue to play a central role, with an estimated share of 29.8% of the global energy mix.
It is worth noting that global investments in oil exploration and production are estimated to reach USD 480.6 billion in 2025, indicating a gap of more than 16% relative to the USD 574 billion needed to meet oil demand through 2050.
OAPEC is committed to supporting increased investment in its member countries’ new oil projects through various strategies, including training programmes and capacity building, sharing best practices, promoting investment opportunities through conferences and encouraging research and co-operation in technology development and transfer, as well as fostering partnerships among stakeholders.
What plans is OAPEC implementing to help its members adapt to shifts in demand and growing competition in the refining and petrochemical segments?
The global energy landscape is undergoing deep shifts, most notably in Asian demand centres. India, in particular, is expected to account for more than 31% of the total growth in global energy demand until 2050.
This is accompanied by changes in trade patterns, driven by the reshaping of supply chains and increased reliance on alternative routes due to geopolitical tensions, as well as rising environmental restrictions, which have significantly increased Europe’s interest in renewable energies. At the same time, growing competition in refining and petrochemicals is pushing producers to focus on high-value-added products.
In light of these changes, OAPEC helps its member countries to achieve a balance between securing energy supplies and developing value chains by preparing regular analytical studies to forecast demand trends and direct investments toward the most profitable and sustainable sectors.
OAPEC also organises events to promote clean technologies, such as CCUS, and digitisation, which plays a vital role in improving operational efficiency and reducing carbon emissions. These efforts will undoubtedly help member countries maintain their competitive position in global energy markets.
Can investments in pipelines and export corridors, and greater energy interconnection among MENA countries, enhance the resilience of regional energy markets?
Geopolitical tensions and logistical risks directly threaten energy trade routes. Since November 2023, the targeting of ships transiting the Red Sea has led to shifts in global trade, with vessels avoiding the Bab El Mandeb Strait, a vital passage for energy supplies to Europe and the US. Many commercial shipping operators have been paying record-high insurance premiums and have taken alternative routes that require more time and incur higher costs.
These developments show that shifts in energy trade routes can become part of a new reality in which countries rearrange their geographic and economic priorities.
As a result, alternative export corridors and investment in new pipelines to bypass chokepoints are becoming more important, and our member countries have begun reassessing their export strategies by diversifying their markets and utilising alternative trade corridors.
For instance, Saudi Aramco operates the East-West crude oil pipeline from the processing centre in Abqaiq to the port of Yanbu on the Red Sea with a capacity of 5 million bpd. Similarly, the UAE operates a pipeline with a capacity of 1.8 million bpd between onshore oilfields and the Fujairah export terminal in the Gulf of Oman.
OAPEC is currently reorganising its structure and operations. Could you update us on the latest developments?
With growing awareness of climate change and greater interest in renewable energy, and with the introduction of strict environmental regulations, the organisation must review its activities and objectives.
At the 113th Ministerial Council Meeting, held in Kuwait on December 15, 2024, a historic decision – Resolution No. 2/113 – was made to change the organisation’s name to the Arab Energy Organization (AEO) to reflect its future role in promoting Arab co-operation in all areas of the energy industry, including conventional and renewable energy.
This decision gives the organisation the green light to continue its development efforts, with substantial amendments set to come into effect once they are approved by the legislatures of each member country.
Foremost among our new initiatives are research and media strategies. The organisation aims to emphasise the continued importance of investment in exploration and production, and the rest of the oil and gas value chain, while playing a major role in the future energy landscape with ambitious policies in both traditional and renewable energy.
OAPEC also aims to promote digital technologies that improve oil and gas extraction and reduce emissions and environmental impact. We want to contribute to member countries’ plans to develop hydrogen production capacity and place increasing emphasis on energy efficiency through investment, innovation and the development of technologies such as CCUS.
With OAPEC member countries set to remain key energy suppliers and play a major role in future energy security, what is your vision for the future of the regional energy industry?
OAPEC member countries will remain a key pillar of global energy supply, and are expected to play a leading role in meeting the needs of oil-consuming nations, especially in Asia, thanks to their abundant reserves. This indicates promising prospects for the downstream segment.
The region will also have a strong presence in the global natural gas landscape. OAPEC members are expected to contribute significantly to LNG trade after projects to boost export capacity are complete. At the same time, member countries have great potential to develop solar and wind energy, and have set ambitious targets. Investments in renewables are expected to reach unprecedented levels shortly.
Many member countries have set specific timelines for hydrogen production capacity and targets for their share of the global market, reflecting a commitment to this technology. With all these factors in play, OAPEC member countries will continue their role in safeguarding global energy security.
What initiatives is OAPEC promoting to support its member countries in diversifying their economies?
As oil-producing and exporting countries, there is no doubt that OAPEC member countries face significant challenges arising from fluctuations in global energy markets. It is no longer appropriate for these economies to continue relying on a single commodity for most of their fiscal revenue, exports and GDP.
Through the outcomes and recommendations of its regular studies and reports, the organisation urges its members to continue growing the role of non-oil sectors in their national economies to diversify their sources of income. It also consistently stresses the need to continue economic liberalisation programmes to reduce the dominance of the public sector, as privatisation leads to better use and allocation of resources.
Furthermore, the falling cost of renewable energy and its rising deployment indicate that there are opportunities for member countries to strengthen their position in the global energy mix by leveraging their abundant renewable energy resources alongside those of oil and natural gas.
Source: Theenergyyear.com