OPEC says gas crisis shows energy transition is being botched

As oil prices push above $80/bbl and fears over the global energy crunch grow, some observers say the OPEC+ coalition isn’t doing enough to steady the market.

For the organization’s top official, Secretary-General Mohammad Barkindo, the blame lies elsewhere. Turmoil spreading from natural gas markets shows that the energy transition is impeding vital investment in supply.

“The energy transition is not being handled properly,” Barkindo said at the Energy Intelligence Forum on Wednesday. “And hence we are beginning to see the fall-out.”

Crude prices rocketed on Monday after the Organization of Petroleum Exporting Countries and its partners chose to continue increasing supplies at a modest pace, even as world oil inventories diminish sharply.

But the volatility isn’t the fault of OPEC, Barkindo insisted. The group’s decision this week to increase supplies gradually — like last year’s agreement to cut output during the pandemic — shows it’s committed to a sustainable market balance, he says.

The fundamental problem in the energy sector lies with the ‘hysteria’ that has gripped thinking on the move away from fossil fuels, shrinking much-needed investment — even in developing countries, he says.

“We call on the leading polluters, the leader emitters” to pause and work on sustainable solutions when they gather for the next round of climate talks in Glasgow next month, he said.

© 2021 Bloomberg L.P.

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