SINGAPORE (The Thursday Times) — Saudi Aramco’s CEO, Amin Nasser, has expressed confidence in China’s oil demand, particularly in light of the country’s recent economic stimulus efforts aimed at boosting growth. Speaking at the Singapore International Energy Week, Nasser highlighted the growing demand for jet fuel and naphtha, driven by the expansion of liquid-to-chemical projects in China. These projects are essential for producing chemicals needed in industries like electric vehicles (EVs) and solar panel manufacturing, both of which are key components of the global energy transition.
Despite significant investment in renewable energy and low-carbon technologies, demand for conventional energy sources such as oil and coal remains at record highs. Nasser emphasised that while progress in transitioning to clean energy is ongoing, it is slower and more complex in Asia than many had anticipated. As a major exporter of oil to China and with stakes in Chinese refineries, Saudi Arabia continues to play a crucial role in meeting the region’s energy needs.
Energy transition in Asia faces challenges
The energy transition in Asia is far more nuanced and challenging than expected. According to Nasser, countries in the Global South, including those in Asia, are likely to see continued growth in oil demand as their economies expand and living standards rise. While the demand for oil may eventually plateau, the current trajectory indicates that over 100 million barrels per day will still be required by 2050, a stark contrast to predictions that oil consumption would drop to 25 million barrels per day.
Nasser urged policymakers to consider more realistic timelines for the energy transition in developing countries, where the cost of transitioning to renewable energy is often prohibitively high. The focus should be on reducing carbon emissions associated with conventional energy sources by improving energy efficiency and investing in technologies like carbon capture, utilisation, and storage (CCUS).
The need for a balanced energy mix
Nasser reiterated the importance of countries choosing an energy mix that aligns with their unique economic and environmental goals. Developing nations, particularly those in Asia, require investments in oil and gas to meet their energy needs while transitioning to cleaner energy sources at their own pace. This pragmatic approach acknowledges the financial and infrastructural challenges many countries face in adopting renewable energy at the speed seen in more developed economies.
He also highlighted the slow adoption of electric vehicles (EVs) in regions such as Asia, Africa, and Latin America, compared to China, the United States, and the European Union. Affordability and lack of infrastructure remain significant barriers to EV penetration in these regions, leaving oil demand from sectors like heavy transportation and petrochemicals largely unaffected by the global shift towards EVs.
Asia’s role in the energy transition
With Asia consuming over half of the world’s energy supplies and still relying on conventional resources for 84% of its energy needs, the region’s energy transition is vital for global sustainability efforts. Nasser pointed out that alternative energy sources, while growing, are primarily meeting new demand rather than replacing existing consumption of conventional energy.
He further stressed that the voice and priorities of Asia and the broader Global South are not sufficiently represented in global climate policy-making, despite the fact that developing countries may need as much as $6 trillion annually to fund their energy transitions. Nasser called for a reset in transition policies that take into account the unique needs of developing nations, ensuring that energy security, affordability, and equity are prioritised in the shift to cleaner energy.