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Oil price could hit $200 without new investments says Omani minister

Crude oil prices could soar with no new upstream investment
Crude oil prices could soar with no new upstream investment

Oil prices could hit $200 per barrel if no new investments are made in the upstream oil and gas sector in the short-term, Oman’s energy and minerals minister said yesterday in reply to the International Energy Agency’s (IEAs) assessment for reaching net-zero emissions by 2050, reported S&P Global Platts.

The IEA said in a May 18 report that, under an energy scenario needed to put the world on a path to net-zero emissions by 2050, there should be no new oil and gas developments and that global oil demand would collapse by 75%.

“Recommending that we should no longer invest in new oil…. I think that’s extremely dangerous,” Mohammed al-Rumhy said at a ministerial dialogue on clean energy transitions in the Middle East and North Africa region organised by the IEA, according to S&P Global Platts.

“My biggest fear, if we stop investing in the fossil fuel industry abruptly, is there will be energy starvation and the price of energy will just shoot [up]. The demand for oil and gas may go down but in the short-term we could see $100/b or $200/b scenario, which although it sounds very attractive today [to producers], it’s something that I think many of us, if not all of us, would not like to see happening in the market.”

Oman, the biggest Middle Eastern oil producer outside OPEC, is a member of the broader OPEC+ coalition, which collectively controls about half of the world’s oil production capacity and is now tapering its output restraint agreement in a bid to balance the oil markets amid the pandemic.

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