Leading up to the Adipec summit in Abu Dhabi, the most prominent energy conference in the Middle East, India has expressed reservations about the escalating crude oil prices approaching the $100 per barrel threshold. Pankaj Jain, Secretary at the Ministry of Petroleum and Natural Gas, emphasized India’s continuous engagement with all oil-producing nations, consistently raising issues regarding the heightened crude prices. During an interview, Jain conveyed India’s unease with the prevailing oil prices, which are currently hovering around $93 a barrel in London, underscoring the urgent need for increased production. While acknowledging OPEC’s authority to determine production levels, India attributes the surge in prices to the group’s implementation of production cuts.
Jain highlighted the detrimental impact of elevated oil prices on demand, stating, “High prices lead to demand destruction.” He further expressed the challenge of sustaining India’s energy needs at these prices. Simultaneously, at an oil conference in Abu Dhabi, Sultan Al Jaber, the President of the upcoming COP28 climate talks, stressed the essential role of the fossil fuel industry in addressing the climate crisis. Al Jaber advocated for utilizing scale, capital, and technology to bring about transformative outcomes. Contrastingly, leaders of oil companies in Abu Dhabi emphasized the economy’s reliance on fossil fuels and attributed the surge in prices to a decline in investments in the sector over recent years.
TotalEnergies is poised to advance its initiatives in the oil and gas sector, anticipating an annual growth rate of two to three percent. In tandem, the company plans to allocate $40 billion for projects related to energy transition and decarbonization, as communicated by CEO Patrick Pouyanne. Wael Sawan, the CEO of Shell, has outlined a commitment of $10 billion to $15 billion over the next three years for low-carbon solutions.
Despite these developments, oil prices witnessed a fourth consecutive day of decline on Tuesday. West Texas Intermediate traded around $88 a barrel, having decreased by 2.2% in the previous session. The sustained drop, totaling almost 6% since last Wednesday, is attributed to concerns about the global economy overshadowing the tightness observed in the physical oil market, thereby clouding the demand outlook. Citigroup Inc. has put forth a projection indicating a decline in Brent crude prices to the low $70s per barrel in the upcoming year. The forecast is grounded in expectations of a market shift back to a surplus, influenced by constrained demand and an increased supply of oil from non-OPEC (Organization of the Petroleum Exporting Countries) sources, as outlined in a note by Citigroup Inc.