The secretary general of OPEC has warned of the consequences of a global oil supply crunch.
Speaking to a commodities summit, Mohammad Sanusi Barkindom, the secretary general said: “This is particularly evident when we look at investment. While investments are expected to pick up slightly this year and in 2018, it is clear that this is not anywhere close to past levels and it is more evident in short-cycle, rather than long-cycle projects, which are the industry’s baseload.
“The issue of a potential investment shortfall was a recurring theme at last week’s Russia Energy Week conference, with President Vladimir Putin, as well as many oil and energy ministers making reference to the critical investment challenge.
“As we have all learned from previous price cycles, such pronounced and long-term declines in investments are a serious threat to future supply. But given our projected future demand for oil, with our upcoming World Oil Outlook 2017 expecting demand to reach over 111 million barrels a day by 2040, an increase of almost 16 million barrels a day, the world simply cannot afford a supply crunch.”
The recent OPEC meeting briefly drove up oil prices to a yearly high before they fell again. The cuts were reaffirmed in a recent meeting between the King of Saudi Arabia and the President of Russia.