NUR-SULTAN – The secretary general of OPEC said on Thursday that oil-producing countries must review their security policies after the attack less than two weeks ago on state-owned energy giant Saudi Aramco’s installations.
Mohammed Barkindo made his remarks at a press conference at the 12th KazEnergy Eurasian Forum in Kazakhstan’s capital, referring to the Sept. 14 drone and missile attacks that targeted Saudi Arabia’s Abqaiq oil processing facility and Khurais oilfield.
“Over the past few months the global oil market has been plagued by uncertainty, due mainly to ongoing trade disputes between the leading trading nations of the world, softening demand and geopolitical developments,” he said, referring to the long-standing trade spat between United States and China.
“This prevailing uncertainty was aggravated further with the recent attacks on the Abqaiq facility and Khurais oilfield in the kingdom of Saudi Arabia.”
Barkindo said no one was prepared for attacks of that nature and said the incident was forcing all OPEC and non-OPEC countries to review their security policies.
“Unfortunately, the incident ... in Saudi Arabia, it was a shock in the oil industry. The issue of energy infrastructure security is especially important now. You see that after the scale of losses, the global market had strong volatility because of the disruption to oil supplies and the threat to oil supplies,” the Nigerian OPEC secretary general said.
The attacks heightened the “need to review the security policy of our energy infrastructure and not only in OPEC countries, but in all oil-producing countries,” he added.
Saudi Arabia, the US, the United Kingdom, Germany and France all blame Iran for the attacks, while the Islamic nation denies any involvement and Yemen’s Iran-aligned Houthi rebels say they carried them out as part of their civil war against Saudi-backed forces.
In a “matter of minutes, an estimated 5.7 million barrels of crude-oil production were taken off the market,” Barkindo said, calling that emergency the “biggest loss in the history of oil.”
Before praising Saudi officials for their swift action to restore output, he noted that the attacks caused oil prices to soar by 18 percent in what was the “highest volatility we have seen in 30 years.”
“Let me emphasize here that any disruption to the steady and secure supply of oil and gas products anywhere in the world is counter-productive and detrimental to the industry and to the wider global economy.”
Barkindo also challenged the notion that electric vehicles are on the verge of replacing conventional vehicles.
“This is simply inaccurate. Our research tells us that although the rate for new sales of electric vehicles is very high, the share of the total stock in 2017 was only 0.3 percent and 1.3 percent of total vehicle sales.”
“We will see the long-term share of electric vehicles in the total fleet reach a level of around 13 percent by 2040. But conventional vehicles will still see the majority of growth of the total vehicle fleet,” Barkindo said.
Kazakh Energy Minister Kanat Bozumbayev, meanwhile, said it was unethical to suggest that his country, which is not an OPEC member, might seek to take advantage of the attack on Saudi Arabia’s oil installations to increase its oil production.
“First of all, we promised OPEC that we wouldn’t increase crude output, and secondly daily production in Kazakhstan does not exceed 1.8 million (barrels per day) and that level will be maintained until March 2020,” he said.
For his part, Kazakh Prime Minister Askar Mamin said the country expects to become a global leader in oil production over time.
He said that to ensure production over the long term Kazkakhstan is continually reviewing and perfecting its policies for attracting foreign investment.