Oil demand remains resilient, hints at optimism for recovery

Sajjad Ahmad, Gulf Today

The global oil demand remains resilient and points at signs for optimism but we still need to focus on costs, said Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Group CEO of the Abu Dhabi National Oil Company during a panel session at the Bloomberg New Economy Forum on Tuesday.

Speaking during the virtual session titled ‘The Rise of Regional Champions: The Search for Resilience in a Fragmenting Global Economy,’ Dr Al Jaber said, “If we take oil demand as a proxy for economic activity for example, even at the height of the lockdowns of March and April, the world still consumed 75 million barrels of oil per day and demand only dropped below 90 million for just 12 weeks. And if you look at the different regions, Europe for example, their growth is slowing down due to new COVID-19 restrictions. He said, “The US recovery is extraordinarily robust, despite the pandemic. And if we look at Asia, the market is recovering very well.”

He added, “So, yes, we need to remain cautious, but there is very good reason for us to be optimistic, and I truly believe that we will get through this much stronger and also in a much healthier manner. What I think we need to do is to remain resilient and to stay focused on what we can control.”

A sharp focus on cost is an important piece of resilience and Adnoc is “very much focused on focus on cost as part of our strategic transformation” which was started four years ago, Al Jaber added.

Dr Sultan Ahmed Al Jaber also highlighted investment and partnership opportunities in the United Arab Emirates.

Commenting alongside Dr Rania Al-Mashat, Egypt’s Minister of International Cooperation, and Bruce Flatt, CEO of Brookfield Asset Management, Dr Al Jaber went on to explain how the UAE continues to attract world-class partners and investors despite the tough economic situation.

“Basically, what we leverage in the UAE is simply our natural assets like for example our abundant feedstock of oil and gas, the world-class infrastructure, the very sophisticated logistics, the strategic geographic location, the well-established regulatory framework and the financial security of our economy. All of these act as a unique and attractive value proposition that helps attract world-class, strategic long-term investors to the UAE.”

He added, “But there is one very important point here that we continue to capitalize on in the UAE and that is our credibility and our very strong, robust historic track record as a trusted and genuine partner. We have a long history of establishing many long-term strategic partnerships and they have always been very successful and helped make the UAE be a destination for very special types of investments.”

A prime example is in the downstream sector where Adnoc is expanding its operations to help create a petrochemicals and derivatives hub in the UAE. “We are developing a manufacturing ecosystem that will provide excellent partnership opportunities for many international investors around the world. And as we continue to diversify our economy, there are many new opportunities through various sectors that we want to build on and that we think international investors will always be very interested in exploring these new opportunities here in the UAE,” Dr Al Jaber said.

Responding to a question on the newly elected administration in the United States, Dr Al Jaber reinforced the strong bilateral ties between both countries, noting that the US is one of the UAE’s oldest and closest friends and strategic allies.

“Our interests and values are aligned in so many areas and so many ways. We are aligned on creating peace, ensuring progress and enabling prosperity across the Middle East. And we are aligned on countering extremism and the forces that undermine stability throughout the region and the world. So together, we are aligned on creating a brighter future, particularly for the young people of this region and we look forward to building on that foundation with the new Administration,” Dr Al Jaber said.

He added that the UAE is looking forward to working with the new administration on climate change while laying out the UAE’s top-notch credentials in renewable and nuclear energy as well as carbon capture utilization and storage (CCUS).

He added,”We are a major oil producing nation, yet we have proactively pursued renewable energy and we are proactively advancing Carbon Capture Utilisation and Storage. We are today the home to the International Renewable Energy Agency, IRENA. We were the first Gulf country to sign the Paris accords and the first in the region to set a clearly defined renewable energy target.”