China’s Oil Demand Growth Is Set for a Significant Slowdown in 2024
Crude oil demand in China is set to slow down sharply next year, a survey among 12 industry analysts and consultants carried out by Bloomberg has suggested. According to the results of the survey, oil demand in the world’s biggest importer will decline to 500,000 barrels daily in 2024 as post-pandemic recovery loses steam. This is just a third of the demand growth rate recorded this year. “Next year, growth will be returning to the normal trajectory with pandemic factors fading. The outlook isn’t so encouraging,” Sinopec senior expert Ke Xiaoming told Bloomberg, adding “Petrochemicals are supported by extra capacity, but are facing poor margins.” The survey follows a forecast released earlier this week by CNPC, which projected that oil demand in China will peak by 2030, at a level of between 780 and 800 million metric tons annually. In its forecast, the CNPC Economics and Technology Research Institute also said that by 2030, petrochemicals will account for 30% of oil demand. This still leaves the bulk of demand in the fuels segment. Over the longer term, demand is seen falling to 220 million tons annually, which should happen by 2060. This year, China led the world’s oil demand growth, accounting for 75% of the total additional demand, according to the International Energy Agency. The annual growth rate increase was also impressive, at 10%, per the CNPC’s Economics and Technology Research Institute. However, it is unlikely to be repeated next year. “This year’s oil demand growth at over 10% will never be repeated,” an oil analyst with the ETRI said, as quoted by Bloomberg. According to FGE, 2024 could mark the start of a structural slowdown in Chinese oil demand as EVs reduce demand for fuels. Even with a slowdown, demand for gasoline and diesel will still increase in 2024, by almost 4% for gasoline and 5% for diesel, according to Rystad Energy.
China’s Oil Demand Growth Is Set for a Significant Slowdown in 2024
Crude oil demand in China is set to slow down sharply next year, a survey among 12 industry analysts and consultants carried out by Bloomberg has suggested. According to the results of the survey, oil demand in the world’s biggest importer will decline to 500,000 barrels daily in 2024 as post-pandemic recovery loses steam. This is just a third of the demand growth rate recorded this year. “Next year, growth will be returning to the normal trajectory with pandemic factors fading. The outlook isn’t so encouraging,” Sinopec senior expert Ke Xiaoming told Bloomberg, adding “Petrochemicals are supported by extra capacity, but are facing poor margins.” The survey follows a forecast released earlier this week by CNPC, which projected that oil demand in China will peak by 2030, at a level of between 780 and 800 million metric tons annually. In its forecast, the CNPC Economics and Technology Research Institute also said that by 2030, petrochemicals will account for 30% of oil demand. This still leaves the bulk of demand in the fuels segment. Over the longer term, demand is seen falling to 220 million tons annually, which should happen by 2060. This year, China led the world’s oil demand growth, accounting for 75% of the total additional demand, according to the International Energy Agency. The annual growth rate increase was also impressive, at 10%, per the CNPC’s Economics and Technology Research Institute. However, it is unlikely to be repeated next year. “This year’s oil demand growth at over 10% will never be repeated,” an oil analyst with the ETRI said, as quoted by Bloomberg. According to FGE, 2024 could mark the start of a structural slowdown in Chinese oil demand as EVs reduce demand for fuels. Even with a slowdown, demand for gasoline and diesel will still increase in 2024, by almost 4% for gasoline and 5% for diesel, according to Rystad Energy.
Can OPEC+ Boost Oil Prices Next Year?
OPEC+ disappointed the oil bulls last week by announcing voluntary cuts from several producers and failing to agree on a group-wide supply reduction, at least for the first quarter of 2024, when demand is typically at its lowest. The alliance and its most prominent members, Saudi Arabia and Russia, rushed to calm the market – where oil prices were already sliding following the underwhelming meeting last week – that OPEC+ could intervene again and extend or deepen the cuts should supply and demand balances warrant it. The OPEC+ cuts were already baked in the price of oil, and a week after the alliance’s meeting, prices hit a six-month low on Wednesday amid swelling U.S. inventories, concerns about the Chinese economy, and fears of weakening global oil demand growth. OPEC+ has to contend with all those bearish signals and with a market currently focused on demand instead of on supply. What’s Next from OPEC+ Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, told Bloomberg on Monday that the OPEC+ production cuts could extend beyond March 2024 if the market requires it. The Saudi energy minister also criticized commentators for failing to understand the output deal and suggested that this would change once “people see the reality of the deal.” “I honestly believe that the 2.2 million will overcome the usual inventory build that usually happens in the first quarter,” Prince Abdulaziz bin Salman told Bloomberg, referring to the overall OPEC+ cuts for the first quarter of 2024, which include Saudi Arabia rolling over its voluntary cut of 1 million barrels per day (bpd). Prince Abdulaziz bin Salman’s remarks were echoed by Russia’s top oilman, Deputy Prime Minister Alexander Novak, who said on Tuesday that the OPEC+ group is ready to take additional measures and deepen the oil production cuts to avoid volatility and speculation on the market. Since “stability” is the preferred OPEC+ word for supporting oil prices, the alliance could attempt to intervene again if prices slide further and demand disappoints. But as last week’s meeting showed, disagreements within OPEC+ run deep, and a unanimous decision could be even more difficult to reach next year. OPEC+ Key to Oil Prices At any rate, the oil market management from OPEC+ would be key to where prices will go next year, Warren Patterson, Head of Commodities strategy at ING, wrote in a note earlier this week. “The outlook for the oil market largely depends on OPEC+ policy,” Patterson said. The cuts announced last week would be enough to erase the previously expected surplus on the market for the first quarter of 2024, according to the bank. “However, our balance still shows a small surplus in 2Q24, which means that the market is largely balanced over 1H24. This could and will likely change depending on how OPEC+ members go about unwinding these voluntary cuts,” Patterson said. ING sees Brent Crude trading in the low $80s early next year, while it forecasts Brent to average $91 per barrel over the second quarter of 2024 when the market will return to deficit. But OPEC+ Faces Many Variables in Controlling Prices A week after the OPEC+ meeting and the latest announcements of production cuts, oil prices have lost around 10% as the market was expecting a larger supply reduction and had already priced in some sort of cuts. Concerns about the Chinese economy, soaring U.S. crude oil production, and rising U.S. commercial inventories and crude exports have all weighed on prices. WTI slipped on Wednesday below the $70 a barrel threshold for the first time since July, and Brent slipped to below $75 per barrel—for the lowest settlement since June. OPEC+ now faces the same old dilemma – how to counter surging U.S. production and prevent it from unraveling the efforts of the alliance to prop up prices. Non-OPEC+ supply is growing at a faster pace than previously forecast and is being led by record U.S. crude oil production, which continued to soar despite a flat or falling rig count compared to this time last year. Record-high U.S. oil production is a “huge problem” for OPEC+, Paul Sankey at Sankey Research told CNBC after last week’s OPEC+ meeting. U.S. crude oil production hit a new monthly record of 13.236 million bpd in September, according to the latest data from the EIA released last week. Demand is also seen currently as a bearish factor for oil prices, especially demand early next year. Concerns about the world’s two largest economies dominate market sentiment. Just this week, credit rating agency Moody’s changed the outlook to negative from stable on China’s government credit ratings, expecting higher financial support needed to prop up the economy to weigh on government finances. “The outlook change also reflects the increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector,” Moody’s said, explaining the negative outlook, which is a warning for a credit rating downgrade. The degree to which the U.S. and its allies will be willing to toughen up the enforcement of the sanctions on the oil exports of Russia and Iran next year will also affect oil prices. OPEC+ will have to factor in many variables in its market-managing policies next year, including a fresh threat to its market share from soaring U.S. and non-OPEC+ production.
India’s long-term appetite for Russian crude intact despite recent slowdown
India’s insatiable appetite for Russian crude has suddenly slowed due to a rise in Middle Eastern flows, widespread refinery maintenances and increased scrutiny on ships carrying Russian oil, but inflows are likely to bounce back in coming months and help the largest non-OPEC exporter maintain its position as the country’s top supplier in the foreseeable future. After rising to an all-time high of 2.1 million b/d in June and remaining as high as 1.69 million b/d in September, imports of Russian crude by Indian refiners have shown a declining trend in recent months. According to S&P Global Commodities at Sea data, Russia remains India’s primary crude oil supplier, accounting for about 33% of the total crude imports, or 1.51 million b/d, in October, and 35% of the total crude imports, or about 1.55 million b/d, in November. While some state refiners are rushing to fulfill term commitments with Middle Eastern suppliers, the removal of sanctions on Venezuela has whetted the appetite of private Indian refiners to resume purchases from the South American supplier. These developments have also contributed to a slowdown in Russian purchases. “Several factors have contributed to the decline in Russian imports. Elevated maintenance activities during October and November resulted in an overall reduction in crude imports. Crude imports from Iraq, the UAE, Saudi Arabia and Kuwait have experienced a slight uptick in October and November. And lastly, refiners are expressing concerns about shipping and insurance,” said Sumit Ritolia, refinery economics analyst at S&P Global Commodity Insights. Peak maintenance India’s refinery crude distillation unit maintenance peaked in October around 600,000 b/d. Reliance Industries completed the scheduled turnaround of a 327,000 b/d CDU at its 630,000 b/d export-oriented facility in mid-November. This unit had been offline since the second half of September for routine maintenance. In addition, Reliance increased its imports of fuel oil from Russia to 197,000 b/d as of Oct. 23, from around 140,000 b/d observed during August and September. This increase aimed to capitalize on high middle distillate margins by processing fuel oil directly in the secondary unit to enhance middle distillate yields, according to S&P Global. “Russian crude imports experienced a slight decline at the onset of this quarter, attributed to various factors. Externally, challenges such as escalating freight costs and complications in repatriating rupee payments to Russia played a role,” said Rajat Kapoor, managing director for oil and gas at Synergy Consulting. “Internally, factors such as local refinery downtimes and a decrease in fuel demand in India post Diwali contributed to this decline.” The slight uptick in crude imports from Iraq, the UAE, Saudi Arabia and Kuwait in October and November can be attributed to the necessity of fulfilling term commitments by public sector oil refiners to state oil companies. Typically, inflows can fluctuate by about 10% of their term commitments. “It is evident that Russian crude imports by private refiners have remained robust. However, there has been a slight decline in imports by state refiners,” Ritolia said. Trade sources and analysts also said that refiners are currently expressing increasing concerns about rising shipping costs and insurance. Revival expected With crude prices dipping below the psychologically crucial $80/b mark, despite OPEC+ production cuts, India could again record steady Russian crude volumes. As the winter season sets in, demand for diesel is expected to pick up in Europe, and with India now being a major fuel exporter to the continent, Indian refiners are expected to increase their refinery runs, which would boost their demand for crude. “Russian crude has found a welcome market in India, and unless stringent price-cap sanctions are rigorously enforced, which seems likely, India looks to continue buying and processing Russian crudes,” Kapoor said. In addition, with Venezuelan crude available in the market, some Indian refiners are expressing interest in purchasing discounted Venezuelan crude to diversify their imports. “The oil market has ample supplies at the moment. In addition, the market is already looking into February loadings and end February-March processing cargoes,” said Tushar Bansal, senior director at consultancy EY Parthenon, based in Munich. “Seasonally, crude demand declines from the peak in February. Hence buyers would look at competitively priced barrels for their crude diet. Going forward, Venezuelan barrels are expected to add further to the supply mix, providing Indian buyers with ample choices.” Indian refiners started snapping up crude shipments from Venezuela barely weeks after the sanctions eased, opening a new battleground for Chinese independent refiners that have been the most active buyers of the feedstock from the South American supplier in recent years. Shipping fixtures showed that India had returned to the market for November- and December-loading cargoes of Venezuelan crude after a three-year suspension since September 2020.
ONGC to cut gas flaring, use green power at oil wells: Chairman Arun Kumar Singh
State-controlled Oil and Natural Gas Corporation (ONGC) plans to wheel green electricity to its installations in the Arabian Sea to replace natural gas it uses in operation of oil wells as part of its ambitious decarbonisation programme, its Chairman Arun Kumar Singh said. India’s top oil and gas producer has substantially cut gas flaring — burning of methane gas is produced when oil is extracted from below surface — and would look to bring it down to nil as part of its environmental commitments, he said while speaking at the 28th UN Climate Change Conference in Dubai, called COP2 Singh said ONGC uses a lot of gas to generate electricity as well as meet compression and other process needs of an oil and gas field. By 2028, this gas is intended to be replaced with green power wheeled to installations as far as 160 km from the west coast. The gas thus freed will be sold to industries like fertiliser and power plants. Companies around the globe have pledged to slash down methane emissions by 30 per cent from 2020 levels by 2030. Methane, which is a more potent greenhouse gas than carbon dioxide, tends to leak into the atmosphere. This is sometimes deliberate when companies flare the gas that comes alongside crude oil, due to lack of consumption markets. It also can leak undetected from drill sites, gas pipelines and other oil and gas equipment. Controlling methane, which has been rising in atmospheric concentration for decades, is seen as one of the easiest and cheapest ways to make an immediate impact on global greenhouse gas emissions. “We have been working very consistently on reducing methane emissions,” Singh said at the session on ‘Accelerating the Elimination of Methane Emissions and the Decarbonisation of Oil & Gas.’ “Because of the (Indian) geography and population, we hardly have any scope to flare,” he said. However, a “very small” amount leaked unintentionally because of the “prohibitive” cost of capturing it, he said, adding that ONGC was working with technology providers to check that. “We want to help the planet by making zero methane from our operations,” he said. Flaring, which used to be done in the past because of lack of customers for gas, has been reduced by almost 80 per cent, he said. Crude oil pumped out of ground can easily be transported in trucks but to take gas from remote well locations to industries requires pipelines. Sometimes, the amount of gas coming out with oil is so low that laying a pipeline becomes uneconomical. “Earlier, we used to flare 14-15 million standard cubic meters per day, but now we are hardly flaring… now it is around 2 per cent,” he said. “Still 2 per cent needs to go down.” He said this gas can be mobilised for use in industries. Singh the ONGC has a substantial consumption of gas for its internal oil and gas field operations. “Basically (for) power generation, pumping, compression and all that.” “In fact, we have aimed that by 2028 we will have a substantive reduction in that by moving to green electricity and release that gas for market,” he said. Green electricity can either be generated offshore using wind turbines or solar panels or wheeled from shore. “Today, out of total production, 20 per cent of gas we consume ourselves for internal purposes. A substantive portion of this we will take it to green electricity because most production is very close to our shores. So naturally (we can) move green electricity there and run electrification of the rigs, etc,” he said. These efforts, he said, are part of ONGC’s decarbonisation drive which will also see the company putting up 10 gigawatt of plants to generate electricity from solar and wind, and constructing a 1 million tonnes per annum green ammonia plant on the west coast. ONGC is also looking at setting pump storage projects at river dams to meet electricity demand at night when solar power cannot be generated. It will also set up compressed biogas plants to convert agri waste into gas that can be used to generate electricity, make fertiliser or turned into CNG to run automobiles. The company, which accounts for about two-thirds of India’s oil production and about 58 per cent of gas, plans to invest Rs 2000 billion on clean energy projects to meet its 2038 net-zero carbon emissions goal. High pressure gas valued at Rs 8.1608 billion was flared in Mumbai High field — the mainstay fields of ONGC — during 2012-20, according to a CAG report released in December 2021. ONGC, however, accepted flaring is a technical necessity. “During the first quarter of 2022-23, gas flaring has been 2.32 per cent of total gas production. ONGC makes continuous efforts to minimise gas flaring. This gas flaring is a technical necessity for processing of oil and gas at installations to maintain pilot flares for avoiding escape of unburned hydrocarbons into the atmosphere… in order to ensure safety and environmental protection,” he said. During 2012-13 to 2019-20, a total of 1,227.343 million metric standard cubic metres of high pressure gas valued at Rs 10.2108 billion was flared, according to the CAG report. French energy giant TotalEnergies’ Chairman and CEO Patrick Pouyanne said more widely misunderstood than CO2 emissions, methane emissions have 28 times their warming capacity and come from multiple sources, notably agriculture, fossil fuel production and use, or decomposing waste. The oil and gas sector alone accounts for 25 per cent of global methane emissions.
Saudi Arabia May Have Set the Price of Its Oil Too High
Asian buyers could reduce intake of term supplies from Saudi Arabia in January and look to buy more spot crude cargoes after the world’s top crude exporter reduced the price of its oil to Asia by less than expected, traders and refiners told Bloomberg on Wednesday. On Tuesday, Saudi Arabia cut the price of its flagship crude, Arab Light, loading in January for Asia by $0.50 per barrel over the Oman/Dubai average, the benchmark off which Middle Eastern crude exports to Asia are priced. While the cut was widely expected by the market and was the first reduction in the official selling price (OSP) of Arab Light for Asia in seven months, it was half of what market participants were anticipating. A Bloomberg survey of analysts showed that Saudi Arabia was expected to reduce its official selling price for the Arab Light crude for Asian buyers by around $1 per barrel—to around $3 a barrel over the Oman/Dubai average. The actual price reduction put the price of Arab Light for January loadings to Asia at $3.50 per barrel over the Oman/Dubai quotes. Despite the reduction, traders and buyers at refineries in Asia see the Saudi price as high. “Saudi set the price too high. That could prompt some buyers to nominate less cargoes and turn to buy cheaper crude from other suppliers from the spot market,” a purchase manager with a refinery in Asia told Reuters. Nominations are expected on Wednesday, but at least two buyers in Asia are considering nominating lower contractual supply from Saudi Arabia for January loadings, traders and refiners told Bloomberg. The Saudis cut on Tuesday their OSPs across the board and reduced Arab Light prices to both Europe and the U.S., but the Asian buyers had expected deeper price reductions and are likely to turn to more spot supply from the Gulf amid falling prices signaling softer demand.
Saudi Arabia Cuts the Price of Its Flagship Crude for Asian Buyers
On Tuesday, Saudi Arabia reduced the official selling price of its flagship Arab Light for Asian buyers in January. This is the first price reduction for the last seven months, Reuters noted in a report, but it is a modest one, at $0.50 per barrel. This is half what analysts expected as a price reduction, the report also said. “Saudi set the price too high. That could prompt some buyers to nominate less cargoes and turn to buy cheaper crude from other suppliers from the spot market,” a refinery executive from Asia told Reuters. An analyst survey that Bloomberg conducted a week ago concluded that there was a significant chance for Saudi Arabia to reduce its official selling prices for Asian buyers in January because of intensified competition from other, non-Middle Eastern producers. The influx of non-Middle Eastern oil comes as Brent crude, the global benchmark, is at near parity with the Dubai benchmark, according to PVM Oil Associates. The development, which is unusual, is the result of OPEC production cuts—notably Saudi Arabia’s voluntary cut—that have pushed Middle Eastern oil prices higher, and closer to Brent. As a result, Bloomberg reported last week, non-Middle Eastern oil has become more attractive for bargain hunters in Asia, doubling as evidence of the unintended effects of the production cuts, such as increased demand for less expensive oil. But Saudi Arabia is not just cutting prices for Asian buyers. The world’s top oil exporter also reduced the price of Arab Light for European buyers, by $2 per barrel, and for U.S. buyers, by a modest $0.30 per barrel. Saudi-led OPEC+ last week agreed to deepen production cuts with more members joining the cutters. For now, plans are to only implement the cuts over the first quarter of next year but Saudi Energy Minister Abdulaziz bin Salman said this week they can “absolutely” be extended beyond the end of March 2024.
Assam contributes 14% of total crude oil production in the country: Minister
Union Petroleum & Natural Gas Minister, Hardeep Singh Puri said that Assam contributes 14% of total crude oil production and1 10% of total natural gas production in the country. Answering the question related to production of petroleum and natural gas from Assam and also the steps taken by the government to reduce the import dependence, he further added that the first refinery in Asia was established in Digboi (Assam) in the year 1901, after the commercial scale production of crude oil at Digboi in 1889. He informed to the House that during the last four financial years i.e. 2019-20 to 2022-23, the total royalty paid to the state government is Rs. 9291 Ccore for crude oil and Rs. 851 crore for gas production. He also specifically mentioned about the major projects in the North East region valuing at Rs. 44000 crore including Numaligarh Refinery expansion project, North East Gas Grid, Paradip-Numaligarh crude oil pipeline and NRL Bio refinery etc. The 2G refinery of 185 klpd capacity at Numaligarh will produce Ethanol from Bamboo and will create huge employment opportunities for local farmers. He also informed to the House that the entire North Eastern States are being covered under the City Gas Distribution network in order to provide cheaper and clean cooking/vehicle fuel to the masses. The Petroleum & Natural Gas Minister informed to the House that the government has reduced the “No Go” areas in Exclusive Economic Zone (EEZ) by almost 99% due to which approx 1 million square kilometres is now free for exploration and production activities. The other measures taken by the government include using latest technologies, replacement and revival of sick and old wells etc. The government is infusing capital expenditure of approx. Rs. crore for increasing production in the coming years. He also mentioned about the transformational steps taken to attract foreign investment in the E&P sector and that the PSU companies ONGC and OIL have entered into agreements with the international oil majors (e.g. ExxonMobil, Chevron, TotalEnergies, Shell etc) for collaboration. Puri highlighted the success in achieving the ethanol blending targets before due date (from 1.53% in 2014 to 12% in 2023) and that the country is now marching ahead to have flex fuel engine vehicles. E20 (20% Ethanol blended fuel) is already available at more than 6000 retail outlets and will be available throughout the country by 2025. He also mentioned about the steps taken by the government to promote alternate sources like CBG, Green Hydrogen and EVs.
COP28: Arab Coordination Group Promises $10B To Assist Developing Nations
The Arab Coordination Group will allocate $10 billion through 2030 to facilitate the energy transition, the group said on Tuesday during the COP28 meeting. The $10 billion in funds is designed to drive “a comprehensive and affordable transition to renewable energy in developing countries,” the ACG said on Tuesday. The funds are part of the group’s previous pledge of $24 billion. The ACG will raise funds through the use of green bonds, blended finance, and risk mitigation tools. The group will also support universal access to clean energy and work to enhance resilience to climate change in the food, transport, water, and urban systems sectors. According to the group’s statement, the ACG allocate $15.7 billion last year to 500 financing operations across 80 countries, which went toward “addressing fundamental challenges faced by societies in developing countries, such as food insecurity and climate change.” The largest share of commitments by ACG members went to the energy sector. The Arab Coordination Group (ACG) is a strategic alliance that provides a coordinated response to development finance, comprising four bilateral and six multilateral Arab development financial institutions: Abu Dhabi Fund for Development, Arab Bank for Economic Development in Africa, Arab Fund for Economic and Social Development, Arab Gulf Program for Development, Arab Monetary Fund, Islamic Development Bank, Kuwait Fund for Arab Economic Development, OPEC Fund for International Development, Qatar Fund for Development, and Saudi Fund for Development. It is the second-largest grouping of development finance institutes in the world. The announcement comes as the UN’s COP28 meeting shines a spotlight on climate financing and facilitating the energy transition. “The delivery of a sustainable and equitable energy transition requires stronger collaboration and joint action. The ACG has the capacity to mobilise substantial financing, boasts nearly 50 years of South-South cooperation and has a proven track-record in advancing sustainable development in its partner countries. The OPEC Fund is proud to contribute to this highly welcome ACG initiative through its own Climate Action Plan,” OPEC Fund Director-General Abdulhamid Alkhalifa said in a statement.
Saudi Arabia’s Plan to ‘Artificially’ Boost Oil Demand
As much of the world accelerates its plans for decarbonization, developing its renewable energy capacity to shift away from fossil fuels, it is becoming apparent that many major oil players are unwilling to follow this strategy to combat climate change. While countries such as the UAE and Saudi Arabia have announced ambitious green energy plans, they are not hiding the fact that they will continue to push their oil and gas agendas for decades to come. A recent investigation has shown that Saudi Arabia has plans to artificially raise global oil demand, creating a whole host of moral questions about the future of global energy. A recent U.K. investigation by the Centre for Climate Reporting and Channel 4 News showed officials from Saudi Arabia’s Oil Sustainability Programme (OSP) admitting that the Saudi government is planning to boost demand in Africa and Asia for petrol, oil and diesel products, as part of a public program by the Ministry of Energy. In a recording, an undercover reporter asks, “My impression is that with issues of climate change, there’s a risk of declining oil demand and so the OSP has kind of been set up to artificially stimulate that demand in some key markets?” The Saudi official responds, “Yes. It is one of the aspects that we are trying to do. It’s one of the main objectives that we are trying to accomplish.” The official goes on to say that the plan is supported by the Saudi ruler Crown Prince Mohammed bin Salman. The plan includes a fleet of power station ships off the coast of Africa, using heavy fuel to generate electricity. It also aims to develop technologies to launch ‘supersonic’ commercial aviation, which would require around three times more kerosine than conventional air travel. Saudi Arabia also plans to increase the number of combustion engine vehicles in the Asian and African markets to drive up fuel demand. Meanwhile, officials stated that they aim to counter market incentives and subsidies for electric vehicles at a global level, to maintain the international reliance on fossil fuels, particularly in emerging markets such as Africa. Saudi Arabia has hardly hidden the fact that it intends to continue pumping crude for as long as possible, so long as the global demand is there. In fact, Saudi Arabia is expected to boost its crude output by over 1 million bpd to more than 13 million bpd by the end of 2026 or the start of 2027, it announced in May. Prince Abdulaziz bin Salman said that Saudi Arabia expects to maintain that level of production if demand permits. Saudi Arabia is the second-largest oil-producing member state in the Organisation of the Petroleum Exporting Countries (OPEC), which has a major role in determining global crude production and pricing. In September this year, OPEC responded to an International Energy Agency forecast that suggested that the demand for fossil fuels would peak before the end of the decade by saying the narrative was “extremely risky,” “impractical” and “ideologically driven.” The secretary general of OPEC, Haitham al-Ghais, explained “Cognisant of the challenge facing the world to eliminate energy poverty, meet rising energy demand, and ensure affordable energy while reducing emissions, OPEC does not dismiss any energy sources or technologies, and believes that all stakeholders should do the same and recognize short- and long-term energy realities.” This statement reinforced OPEC’s stance on fossil fuels, suggesting that it believes a weakening global demand for oil and gas is still a long way off. Despite the clear ambitions of Saudi Arabia and OPEC to maintain, or even increase, oil output – so long as the demand is there – the recent phrasing of ‘artificially’ creating oil demand has drawn criticism. This news came just days before the beginning of the COP28 climate summit, which is being held in Dubai. There has been widespread criticism around the latest summit, with worries that the aims for a green transition being promoted at COP are at odds with the objectives of the UAE and other oil-producing Middle East states. This once again raises the question of the need for funding for developing states to participate in a green transition. The head of the World Bank, Ajay Banga, recently emphasized the need for rich countries and companies to help developing countries leapfrog over fossil-fuelled economic growth in favor of developing their renewable resources. Banga said that this would be the only way to achieve net-zero carbon emissions by 2050, in line with the Paris Agreement’s aims, to restrict global heating to below 2oC. Recently, there has been greater optimism around the funding of projects in developing countries to support a green transition. Last week, Indonesia announced a $20 billion investment plan to develop its renewable energy capacity with funding coming from global lenders. Shortly after, Mozambique approved an energy transition strategy worth $80 billion, appealing for funding from wealthy nations. Mozambique is home to one of the largest untapped coal reserves in the world, as well as lots of offshore natural gas, which could remain largely untapped if it is successful at financing its renewable energy sector to support economic growth. Financing schemes such as these could help counter the ambitions of oil-rich countries and major fossil fuel companies to maintain the global demand for fossil fuels by supporting economic growth through the development of renewable resources worldwide.