The increase in oil revenue and oil activities will help Saudi Arabia achieve its sustainability goals, Faisal al-Ibrahim, the Kingdom’s minister of economy and planning said in a World Economic Forum address on Wednesday.
The minister’s claim comes as global oil prices rally amid higher demand brought about by Russia’s invasion of Ukraine.
Regardless of the hike in oil use and production, the Saudi Arabia Green Initiative, the Middle East Green Initiative, and Vision 2030 goals to generate 50 percent of energy from renewables are “all moving according to plan,” the minister added.
The Saudi economy is projected to grow 7.4 percent this year. “Last year, our non-oil activities grew at 6.1 percent, and we want that trend to continue,” the minister clarified.
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“The last thing we want is focusing on climate change without focusing on energy security and energy development,” he said, echoing the call for continued investment in fossil fuels to support the transition into clean energy by Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman.
Oil prices have not been favorable to the oil producing countries in recent years, especially since the onset of the pandemic.
While the world faced COVID-19, Saudi Arabia faced a dual challenge, said Mohammed al-Jadaan, the Minister of Finance, adding that the country had to battle both with COVID-19 and a plunge in oil prices.
“We had to take tough decisions, but we communicated that with the public and private sector, and the end result is we have a lot more trust from the public with the sectors and we provided the right support,” he said at the same WEF panel in Davos.
“Our policies are clear. Energy demands from oil will continue to increase according to consensus from experts. We will continue to increase capacity, and we will continue to advocate increased capacity,” said the Saudi minister of economy and planning.
He also urged that the increased investment in oil will not “contradict” the Kingdom’s strong advocacy for reducing carbon emission and tackling climate change.
“The last thing we want to see if go back to burn the dirtiest kind of coal in a time of need,” al-Ibrahim said.
The energy minister said early in May that even before the Ukraine crisis, “the la la land scenario about net-zero had been smacked with so many realities,” including cost, during a public address at an aviation summit in Riyadh.
Recently, Amin Nasser the head of Saudi Aramco told Reuters that the world is facing a “major oil supply crunch as most companies are afraid to invest in the sector as they face green energy pressures,” adding it cannot expand production capacity any faster than promised.
Saudi Arabia is currently producing 10.5 million bpd, or every tenth barrel in the world, and will likely raise output to 11 million bpd later this year when a broader pact between OPEC and allies such as Russia expires, Reuters reported.