Russia-Ukraine crisis shows how sensitive oil prices are to geopolitical tensions: UAE Minister

Russia-Ukraine crisis shows how sensitive oil prices are to geopolitical tensions: UAE Minister

Oil sector faces $200 billion under-investment

Sultan bin Ahmed Al Jaber

Published: Mon 28 Mar 2022, 2:16 PM

The oil sector is witnessing an underinvestment of $200 billion while demand continues to grow and will reach its pre-pandemic level in the fourth quarter of this year, said Dr Sultan Ahmed Al Jaber, Special Envoy for Climate Change, Minister of Industry and Advanced Technology, UAE, managing director and group CEO, Abu Dhabi National Oil Company (Adnoc).

While speaking at the World Government Summit at Expo 2020 Dubai, Al Jaber said the world is witnessing how sensitive energy markets are to geopolitical shocks after the Russia-Ukraine crisis.

“Yet, the current volatility in oil prices is a result of a deeper underlined structural issues. Long time under investment in oil and gas has left markets more exposed to risks of any kind and wherever they take place,” the minister said.

Quoting International Energy Agency data, the minister added that annual investment in oil and gas is still $200 billion below where it needs to be. “That is just to keep up with the demand through 2030. In the near term, we are also seeing markets tightening with demand up almost three million barrels over last year and expected to