OPEC Secretary-General: "High Oil Prices Will Persist... Need to Increase Investment in Oil Industry"

[Image source=Reuters Yonhap News]

Haitham Al-Ghais, Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), forecasted that the high oil price situation will continue due to the global increase in oil demand.

On the 3rd (local time), according to BBC, Secretary-General Al-Ghais stated in an interview with BBC ahead of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), the world's largest oil and gas industry exhibition, that "the average daily oil demand is increasing by about 2.4 million barrels."

International oil prices have recently continued to soar due to production cuts by OPEC and the non-OPEC major oil-producing countries coalition, OPEC+.

With Saudi Arabia and Russia, leading OPEC+, announcing that they will maintain their voluntary production cut policies until the end of this year, oil prices surpassed $90 per barrel, and there are even forecasts of surpassing $100.

Regarding concerns that severe supply shortages will occur due to the production cuts by the two countries, Secretary-General Al-Ghais explained, "It is a voluntary decision by the two sovereign countries, Saudi Arabia and Russia," adding, "It is a precautionary and proactive measure considering uncertainties."

He also responded to the criticism that oil prices surpassing the $100 mark could trigger global inflationary pressures by saying, "It is important not to view the matter short-sightedly."

He also mentioned the lack of investment in the oil industry.

Secretary-General Al-Ghais pointed out, "Some call for a halt to investment in the oil industry," adding, "We also believe this is risky. If investment stops, supply will become insufficient and market volatility will increase."

He further predicted, "Energy demand will increase by 25% by 2045 compared to now, and all forms of energy will be needed," adding, "Therefore, about $14 trillion (approximately 19,000 trillion KRW) in investment will be required in the oil industry by then."