February 22, 2024 [Oil Price]-Global oil supply is sufficient now, but natural declines at oilfields mean that the world would need to find a Saudi Arabia every two years to offset these production drops, Saudi Aramco’s chief financial officer Ziad Al-Murshed has said.
Due to the natural decline in operating fields, as many as 6 million barrels per day (bpd) of global oil production is being lost every year and needs to be replaced, Al-Murshed said at the Saudi Capital Market Forum 2024 in Riyadh.
The world is down to 3% of spare crude oil production capacity of global demand, Aramco’s executive said.
If there isn’t significant investment in oil production, the world could find itself short of spare capacity and supply, according to the manager.
Right now, Aramco sees sufficient supply on the market and believes that global oil demand has recovered, Al-Murshed said.
At the end of last month, Saudi Arabia surprised the oil market by announcing a shift in production capacity strategy. State oil giant Aramco said it was ordered by the Kingdom’s leadership to stop work on expanding its maximum sustainable capacity to 13 million barrels per day, instead keeping it at 12 million bpd.
Saudi Arabia’s decision to abandon the expansion plans is a result of the energy transition, Saudi Energy Minister, Prince Abdulaziz bin Salman, said earlier this month.
Global oil demand is expected to remain robust in the long term and the recent Saudi reversal of production capacity expansion shouldn’t be read as a view of falling demand, OPEC Secretary General Haitham Al Ghais said last week.
“First of all I want to be clear I cannot comment on a Saudi decision … but this is in no way to be misconstrued as a view that demand is falling,” Al Ghais told Reuters on the sidelines of a summit in Dubai.
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