There is no one-size-fits-all solution for our sustainable energy future

In an exclusive interview with India Energy Week News, His Excellency Haitham Al Ghais, OPEC Secretary General, shares his views on India’s pivotal role in the future of the energy industry, how chronic underinvestment in hydrocarbons would undermine security of energy supplies and trigger market volatility, and the need for a long-term stable investment-friendly climate that works for producers and consumers and one that continues the industry’s major advances in helping reduce emissions

As the industry gathers for the second edition of India Energy Week, what are your thoughts on the outlook for the global oil industry in 2024?

At the outset of 2024, the OPEC Secretariat remains optimistic about the fundamental factors related to oil market dynamics across the year. 

In terms of the global economy, a less pronounced inflationary environment may enable major central banks to consider more accommodative monetary policies, and improvements in domestic demand and external trade have the potential to further support major developing economies. Nevertheless, we recognise that some challenges persist, including high, albeit declining, core inflation rates, labour market constraints in advanced economies and ongoing geopolitical tensions. We currently see global GDP at 2.6% in 2024.

From the perspective of oil demand, we see a healthy growth of 2.2 million barrels a day (mb/d) in 2024, driven by the non-OECD economies. This forecast centres on sustained economic and petrochemical activity across major consumer nations, fostering demand for transportation fuels and distillates across the year.

We see non-OPEC supply expanding by 1.4 mb/d in 2024, driven mainly by US tight oil output, as well as offshore start-ups in Latin America and the North Sea, and the expansion of Canadian oil sands projects. 

With demand continuing to expand, what we do hope to see in 2024 is further recognition of the need for more investment in the global oil industry. In our World Oil Outlook 2023 (WOO), over the long-term we see oil demand rising to 116 mb/d by 2045. This leads to investment requirements totaling $14 trillion, or around $610 billion on average per year. We need a long-term stable investment-friendly climate, one that works for producers and consumers and one that continues the industry’s major advances in helping reduce emissions. 

We need to reiterate that the misguided notion of no longer investing in new oil projects would undermine security of energy supplies and lead to major volatility.  

With the world seeking to foster global energy security, deliver energy affordability and reduce emissions, how will those factors shape the strategic relationship between OPEC and India?

The relationship between India and OPEC continues to go from strength to strength, epitomised most recently by the successful 6th High-Level Meeting of the OPEC-India Energy Dialogue that took place in Vienna in November last year.

I would like to thank His Excellency Hardeep Singh Puri, India’s Minister of Petroleum and Natural Gas, for his continued support for our dialogue, and I would like to take this opportunity to praise India’s inclusive and effective G20 Presidency in 2023, and particularly its balanced, realistic and pragmatic approach towards energy issues.

This type of approach will be crucial as we take an honest look at the realities on the ground, in terms of how the world can deliver on energy security, energy access and affordability and reducing emissions. The Indian government has said consistently that the future will require all forms of energy, which is a message that OPEC fully supports. It is vital that we appreciate what each energy source offers, and from the perspective of oil, we have no doubt it can deliver on all three fronts.

India will play a very important role in the future of the industry. According to our forecasts, oil demand in India is set to rise from 5.1 mb/d in 2022 to 11.7 mb/d by 2045. It will be the country with the largest oil demand growth over this period. 

Given India’s future energy needs for its expanding and aspirational population, and the fact that OPEC Member Countries today provide approximately 60% of India’s total crude oil imports, this strategic relationship will continue to be vital in the years and decades ahead.  

This is why we continue to be aligned by the need for every nation and peoples to have their own energy transition pathways. It is not a uniform energy transition for all; there are multiple pathways to take. There is no one-size-fits-all solution to a sustainable energy future.

The World Oil Outlook 2023 says that in order to achieve a sustainable, orderly and just energy future, policymakers need to adopt an ‘all-peoples, all-fuels, and all-technologies’ approach. Could you elaborate on that, particularly following the outcome of COP28?

We are proud that COP28 took place in an OPEC Member Country, the United Arab Emirates and we back the COP28 approach that is vital our energy future is driven by inclusivity, with all voices continuing to be heard.

We will need an all-energies approach. Otherwise, the world cannot meet rising energy demand, maintain energy security and ensure affordable universal energy access. We will need an all-peoples approach. The capacities, national circumstances, and development priorities of all countries must be taken into account to ensure that no one is left behind. And, we will need an all-technologies approach.

The world needs to develop and finance all forms of technologies to help reduce emissions while meeting demand.

From OPEC’s perspective, our Member Countries will continue to invest in upstream and downstream capacity. They will continue to meet the needs of consumers, and help ensure a stable and sustainable market.   

Member Countries are also mobilising cleaner technologies to reduce industry emissions, such as carbon capture, utilisation, and storage (CCUS), carbon dioxide removal and others, and making major investments in renewables and hydrogen capacity.

We also should recall that at COP28 in December, some 50 oil and natural gas producers, including from OPEC Member Countries, signed an agreement to reduce their carbon emissions to net zero by 2050 and curb methane emissions to near-zero by 2030.

Looking ahead, what are the strategies being adopted by OPEC to ensure the long-term prosperity and stability of global oil markets?

OPEC has a long 63-year plus history of supporting oil market stability. Based on this, the Organization takes an ‘all-timeframes’ view of the global oil market. We are attentive to the importance of stability in both the short- and long-terms.

For example, the Declaration of Cooperation between OPEC and 10 non-OPEC countries continues to act with unity in the group’s unwavering efforts to contribute to oil market stability and provide guidance for the market, for the benefit of both producers, consumers, investors, and the global economy in general.

Looking longer term, the Charter of Cooperation (CoC) that was established between OPEC and non-OPEC producers in July 2019 provides a platform to facilitate dialogue and exchange views regarding such issues as global oil and energy market developments, policy developments, technological options and investment opportunities.

The CoC was further enhanced at the beginning of the year when Brazil joined the group, which is a significant development given that it is a large oil producer, a BRICs member, the chair of the G20 in 2024 and host of COP30 in 2025.

At OPEC, we understand the value that crude oil and its derivatives bring to people, nations and economies. It is a constant presence in our daily lives. 

How important is India Energy Week in being the catalyst of growth for the energy sector in India and the world?

I attended the first edition of India Energy Week in 2023 and it proved to be an excellent platform for engagement and bringing industry stakeholders together. I have no doubt the 2024 version will be a success, and underscore the ever-expanding importance of India on the global stage. 

We welcome this year’s overall theme of ‘Growth. Collaboration. Transition.’ It brings together all the parts of evolving a sustainable energy future. It has never been more important to work together and adopt a holistic, practical and inclusionary approach as the world concentrates on the task of providing energy security for all and reducing emissions.