By Alessandra Galloni and Dmitry Zhdannikov

DAVOS (Reuters). -Finally, oil prices are rising as companies fear investing in this sector due to green energy pressures. Saudi Aramco (TADAWUL) stated to Reuters it can’t increase its production capacity faster than was promised.

Amin Nasser, the chief of the world’s largest oil producer said Monday that he is sticking with the goal of increasing capacity by 13 million barrels/day from the 12 million at present, even though there have been calls for it to be done faster.

“The world runs with less than 2 percent of its spare capacity. Prior to COVID, the world’s aviation industry consumed 2.5 million bpd less than it does today. “If the aviation industry speeds up, then you will have a problem,” Nasser said to Reuters at the World Economic Forum in Davos.

The events in Russia-Ukraine obscured what could have been. A lack of investments was causing us to experience an energy crisis. He said that the pandemic caused it to become more severe.

Nasser stated that COVID limitations in China will not be extended for long, and the global oil demand will resume its growth.

Saudi Arabia currently produces 10.5 million barrels per day, which is the equivalent of every tenth barrel around the globe. It will increase its output to 11,000,000 bpd when a wider pact between OPEC, Russia, and other allies expires.

Riyadh is being urged by the West, to boost output faster and increase capacity quicker to address the energy crisis.

We would do it if we had the ability to (expand our capacity) by 2027. We tell policymakers this. It is not easy.

CHAOTIC TRANSITION

Nasser stated that dialogue has not been possible between policy makers and the oil industry regarding the transition to non-carbon emitting energy from fossil fuels.

“I do not believe there’s a lot constructive dialog going on. Some areas are not open to us. “We were not invited for COP at Glasgow,” he stated, referring to last year’s U.N. Climate Conference in Glasgow.

He stated, in addition to the above statement from last year’s International Energy Agency message that global oil demand is expected to drop and no further investment in fossil fuel was required had a significant impact.

We need to have a constructive dialog. You say that we won’t need your services by 2030. So why would they allow you to build something that could take 6 years? It will be a burden on your shareholder.

He stated that the energy transition was often chaotic and disruptive.

There is no plan that works. He said, “There is no good plan… There is a lot of pressure to invest. If you don’t, your assets will be stranded. This makes it difficult for CEOs and entrepreneurs to invest.

The so-called “stranded asset theory” is the idea that large oil and gas resources are not used because they are no longer needed.

Nasser claimed that Asian countries will continue to use coal in greater quantities if there are missteps made during the transition to global energy.

For policymakers from those countries, the primary goal is to feed their citizens. They will use coal if coal is able to do it at half the cost.

Aramco was the largest shareholder of Saudi Arabia, and he said that it was unique because it invested in both energy transition and fossil fuels.

That is our distinction from all others. We are not adding enough energy to secure the world’s security.