The world’s failure to invest enough in fossil fuels before cleaner alternatives can fully meet today’s energy needs is a “recipe for disaster,” according to Sultan Al Jaber, chief executive officer of Abu Dhabi National Oil Co.
Oil producers have limited ability to react to further disruptions in energy supplies as spare crude capacity is currently less than 2 per cent of global demand, Al Jaber said at the Bloomberg Emerging + Frontier Forum 2022 in New York.
“That doesn’t give a lot of room to maneuver. In fact, it’s a recipe for disaster,” Al Jaber said.
A supply crunch has sent oil and natural gas prices soaring since the pandemic, helping drive inflation all over the globe to the highest levels in decades and leading the US to unleash a record amount of crude from its strategic reserves as a way to rein in prices.
Shortage risks have been aggravated by the crisis in Ukraine.
Al Jaber said the UAE is “fully committed” to the energy transition, though “more realism about the scale of the challenge” is needed to properly address it.