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Shell CEO Benvan Beurden recently warned of low oil market reserves and questioned the replacement of Russian gas with LNG in Europe.
“I think the market will face considerable uncertainty for the foreseeable future,” the reporters said. Reuters.. “The reserve capacity is very low,” he added, noting that the global oil and gas market is still in the recovery stage.
Sanctions have restricted the export of refined Russian products, so supply conditions are tough, he said. Shell’s CEO has also accused China of not exporting petroleum products “intentionally or for domestic reasons.”
Very few OPEC countries are said to have surplus capacity, such as Saudi Arabia and the United Arab Emirates. Saudi Arabia’s state-owned oil giant, Aramco, claims to be able to produce up to 12 million barrels of oil per day, exceeding OPEC +’s August target of 11 million barrels per day in the kingdom by 1 million barrels. increase.
However, in Aramco’s history, it produced 11 million barrels per day in just eight weeks. It is uncertain whether Saudi Arabia will be able to maintain this level of production for the rest of 2022 and even next year.
As a bystander at the G7 Summit, I heard French President Emmanuel Macron talking to President Joe Biden about concerns about the ability of the United Arab Emirates and Saudi Arabia to increase production.United Arab Emirates leader Sheikh Mohammed bin Zayed al-Nahyan said, “Tell me two things. I’m the biggest and the biggest. [production capacity].. This is his claim, “Macron said. Reuters..
“And he said [the] Saudi Arabia could increase by 150 [thousand barrels per day].. It may be a little more, but 6 months ago there wasn’t much capacity. “
European gas supply situation
While talking to reporters, Van Baden also revealed his concerns about the gas supply situation in Europe. Maintenance of Nord Stream 1 has reduced Russia’s gas supply. As a result, European buyers are looking to import LNG. This raised concerns about supply ahead of peak winter demand, Van Baden said.
Shell CEO believes it is “impossible” to replace the entire pipeline gas capacity from Russia with LNG. He warned that things could be a “problem” if Europe was not willing to take “significant steps” such as distribution and energy savings, according to Reuters.
In an interview with BloombergFatih Birol, secretary-general of the International Energy Agency (IEA), said Europe would have to cut gas usage by 30% by mid-February if the flow of gas from Russia stopped.
“At some point, if Russia’s gas supply to Europe is completely cut off, storage and filling levels could be well below average before winter, putting the EU in a very vulnerable position.” Said Birol. “In the current situation, we do not intend to rule out a complete block of gas exports from Russia to Europe.”
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Naveen Athrappully is a news reporter on business and global events in The Epoch Times.
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