Leaders wary of predicting oil prices

New Straits Times

4 hours ago

KUALA LUMPUR: Some chief executives of top energy companies, participating at a global energy conference here, are not about to make firm predictions on oil prices in light of Israel's attack on Iran.
They said it was still too early to say what impact the fighting between Israel and Iran would pose on energy supplies.
Participants at the three-day conference till Wednesday, were told that a staggering US$17.4 trillion investments were needed for the oil industry by 2050.
Malaysia's national oil company Petronas, meanwhile, said heightened tensions around the Strait of Hormuz - a vital channel transporting 18 million to 19 million barrels of oil daily or about 20 per cent of global supply - had pushed oil prices higher in recent days.
Petronas president and group chief executive officer Tengku Tan Sri Muhammad Taufik said the global energy system remains under pressure from retaliatory tariffs and geopolitical shocks.
"This is despite some viewing the current surge in oil prices as the most significant since the 2022 energy crisis," he said in his opening address at Energy Asia 2025 conference.
"A global energy system already strained by the natural evolution of civilisation is now truly in a precarious state, even though the actual impact of these events has yet to be fully measured."
He said the 2022 energy crisis in Europe should have served as a wake-up call on how vulnerable the world's energy supply is to geopolitical shocks and climate risks.
Tengku Muhammad Taufik also pointed to surging electricity demand, driven by the rapid expansion of artificial intelligence, especially in the data centre sector.
"Electricity demand from data centres is projected to rise to 945 terawatt-hours by 2030, up from 415 terawatt-hours in 2024, more than double in just six years.
"This situation demands urgent adaptation of the energy system and fresh infrastructure investment to meet growing demand.
"Energy is a driver of human development. No technological revolution can occur without sufficient, efficient and accessible energy," he said.
Meanwhile, speaking at the conference on Monday,Baker Hughes president and chief executive officer Lorenzo Simonelli told CNBC's "Squawk Box Asia" that "my experience has been, never try and predict what the price of oil is going to be, because there's one sure thing: You're going to be wrong."
Simonelli said the last 96 hours "have been very fluid," and expressed hope that there would be a de-escalation in tensions in the region.
"As we go forward, we'll obviously monitor the situation like everybody else is. It is moving very quickly, and we're going to anticipate the aspect of what's next," he added, saying that the company will take a wait-and-see approach for its projects.
At the same conference, Meg O'Neill, CEO of Australian oil and gas giant Woodside Energy, told CNBC that the company is monitoring the impact of the conflict on markets around the world.
She highlighted that forward prices were already experiencing "very significant" effects in light of the events of the past four days.
If supplies through the Strait of Hormuz are affected, "that would have even more significant effects on prices, as customers around the world would be scrambling to meet their own energy needs," she added.
Reuters reported that oil prices were volatile on Monday, after surging seven per cent on Friday, as renewed strikes by Israel and Iran over the weekend increased concerns that the conflict could widen across the Middle East and significantly disrupt oil exports from the region.
Brent crude futures were up 33 cents, or 0.4 per cent, to US$74.56 a barrel by 0732 GMT, while US West Texas Intermediate crude futures gained 38 cents or 0.5 per cent, to US$73.36.
They had surged more than US$4 a barrel earlier in the session and also fell into negative territory briefly.
Speaking at the conference's ministerial plenary, Opec secretary general Haitham Al Ghais underscored the need for significant investment in the oil sector to ensure a reliable energy supply while meeting growing demand.
"One of the key issues that I keep repeating, and Opec's position has been very clear upon, is investments.
"Sustainability and continuous flow of investments in energy systems overall - and for us, particularly in oil - are critical," he said.
He detailed that Opec forecasts US$17.4 trillion investment requirement for the oil industry by 2050, translating to about US$640 billion annually.
"This investment spans the upstream, downstream, and midstream sectors, which must be viewed as an integrated value chain," he added.
Despite global momentum toward renewables, Haitham highlighted that oil remains indispensable to daily life, representing 30 per cent of the global energy mix.