The Secretary-General of the Organization of Petroleum Exporting Countries (OPEC), Mohammed Barkindo, said crude oil prices are affected by a “transition premium” amid the changeover to renewables, as well as the fundamentals of global supply and demand, at the Gastech industry event in Dubai. He refused to say how much of a difference the transition premium made to global oil prices.
Tuesday’s second trading session saw oil prices rise. Brent, the international benchmark, was up 1% at $74.66 per barrel as of 4.43 p.m. UAE time. The West Texas Intermediate, which measures US crude grades, was trading at $71 per barrel, up 1.01%.
He commented: “I am sure you must have noticed in the market today. The prices that we are seeing are not entirely dictated by supply and demand conditions because a transition premium is [added to] the prices of hydrocarbons.”
He called out the “misrepresentation” of the oil industry by oil activists. “Unfortunately, this global conversation has been thoroughly misrepresented. And the narrative is being distorted because emotions have taken over industry facts.”
His remarks come after the International Energy Agency called for a halt to all fossil fuel investments and a cap on sales of internal combustion engine passenger cars by 2050 to meet global net-zero ambitions.
He said: “Facts are very clear, that this world will continue to consume energy. In our forecast to 2045, we project that demand for energy will grow by a whopping 28%.”
“Oil and gas will remain the dominant sources of energy in the global energy [landscape].”
The Organization of Petroleum Exporting Countries (OPEC) continues to be bullish on oil demand. According to its most recent demand prediction, consumption would exceed pre-pandemic levels in 2022. Global oil demand is expected to hit 100.8 million barrels per day next year. The organisation also raised its forecasted demand growth for 2022 by 900,000 bpd to 4.2 million bpd, citing the anticipation of higher economic activity and fewer movement constraints.
