When it comes to the price of oil, geopolitical volatility is usually a tailwind. However, when it comes to what big oil CEOs worry about the most, these conflicts – including the ongoing ones in the Middle East – are top of the list, according to a new report from Bloomberg.
Oil executives are meeting at the region’s largest energy conference amid high market volatility, the report says. Rising tensions between Israel and Iran, an OPEC member, have traders wary of possible supply disruptions, while China’s weak economy is slowing oil demand growth.
Meanwhile, U.S.-China relations remain uncertain, since President-elect Donald Trump has pledged significant tariff hikes on China if elected.
BP Chief Executive Officer Murray Auchincloss commented: “The conflict in the Middle East is probably the top risk of all right now. We operate across five or six countries in the region — we are worried obviously about the security of our people and the security of energy supplies.”
Shell CEO Wael Sawan added that “what happens on the US-China axis” is also a concern. He added: “We fundamentally believe the world will need more energy and we fundamentally believe it will need different forms of energy.”
Executives on Monday expressed confidence that oil demand will keep growing, despite Asia’s economic slowdown, necessitating continued investment to meet supply needs even as the world shifts toward cleaner energy.
Bloomberg reports that CEOs voiced mixed views on demand, with some anticipating strong growth despite a cooling Chinese economy. The International Energy Agency (IEA) expects demand to peak before 2030, while OPEC and Saudi Aramco remain optimistic, especially with recent Chinese stimulus.
Petronas CEO Muhammad Taufik believes demand will continue beyond 2030, though price volatility hinders investment, potentially pushing futures higher, noted Eni’s CEO Claudio Descalzi.
Tyler Durden
Wed, 11/06/2024 – 19:40
