The primary cause of the current energy crisis is years of underinvestment in oil and gas production, and when the global economy recovers from the current slowdown, what little spare oil production capacity is left will be eliminated, according to Amin Nasser, chief executive of Saudi Aramco.

Speaking to the audience at the Schlumberger Digital Forum 2022 in Switzerland this week, he reemphasised the need for continuous investment in the global oil and gas sector as the current energy crisis is enough proof that we need more investment.

Between 2014 and 2021, oil and gas investment more than halved. According to the top executive of Aramco, annual investments in oil and gas decreased from $700 billion in 2014 to just over $300 billion last year.

Excerpts from his submission:

“Many of us have been insisting for years that if investments in oil and gas continued to fall, global supply growth would lag behind demand, impacting markets, the global economy, and people’s lives.”

“The increases this year are too little, too late, too short-term.”

 “These are the real causes of this state of energy insecurity: under-investment in oil and gas; alternatives not ready; and no back-up plan. But you would not know that from the response so far.”

“Even with strong economic headwinds, global oil demand is still fairly healthy today.”

“But when the global economy recovers, we can expect demand to rebound further, eliminating the little spare oil production capacity out there. And by the time the world wakes up to these blind spots, it may be too late to change course.”

“That is why I am seriously concerned.”

“And at least this crisis has finally convinced people that we need a more credible energy transition plan.”

By 2027, Saudi Arabia expects to increase its production capacity from its current level of roughly 12 million barrels per day (bpd) to 13 million bpd, but not much more.