Friends again, Qatar and Saudi Arabia warn over prospects for higher energy prices
Gathering at Qatar Economic Forum, oil and gas producers urge more flexible goals in international effort to reduce carbon emissions
Mohamad Dabbous/Anadolu Agency via Getty Images
Putting aside past disputes, the energy ministers of Qatar and Saudi Arabia came together to warn about the likelihood of higher natural gas prices this year and cuts in oil supply, arguing that global targets for shifting away from fossil fuels are unrealistic.
“There’s going to be a big shortage in gas in the future, predominantly because of the energy-transition push that we’d say is very aggressive,” Saad al-Kaabi, Qatar’s energy minister, said at the Qatar Economic Forum last week. “Economic stability and environmental responsibility are not mutually exclusive. You have to have both.”
Al-Kaabi spoke at the opening of the three-day conference in Doha, Qatar, an annual gathering of investors, corporate executives and government leaders that is underwritten by the wealthy Gulf state and co-sponsored by Bloomberg LP, the financial information company. The event drew world figures ranging from TikTok CEO Shou Chew and former Treasury Secretary Steven Mnuchin to economist Nouriel Roubini and artist Jeff Koons. The panels were webcast on the conference’s internet site.
The conference also underlined efforts by Qatar and Saudi Arabia to resolve their four-year rift in which a Saudi-led coalition including the UAE, Bahrain and Egypt cut off all ties in 2017. The break in relations was accompanied by an air, sea and land blockade of Qatar, which lasted through early 2021. Both sides are now trying to patch over their differences.
“I don’t call myself a guest,” the Saudi energy minister, Prince Abdulaziz bin Salman, said on the opening panel in Qatar. “I’m part of this country and part of the family.”
As the United Nations has rallied governments around the world to reduce carbon emissions, Saudi Arabia, Qatar and other producers of oil and gas have cautioned against moving too quickly because solar power, hydrogen and other renewable energy sources won’t displace petroleum for decades. The question has become central in the run-up to the U.N.’s COP28 climate conference in November, which will be hosted by the United Arab Emirates.
Prince Abdulaziz said oil producers need to protect their economies against short-sellers in the market who are betting on lower prices. The prospects of reduced oil revenue led the 23 member-nation OPEC+ group to agree in October 2022 and April 2023 on voluntary cuts in supplies of more than 3 million barrels a day. It also prompted President Joe Biden’s trip to Saudi Arabia last July to push for expanded oil production.
“Speculators, like in any market, they are there to stay,” the Saudi minister said. “I would just tell them, watch out.” He added, “I keep advising that they will be ‘ouching.’ They did ouch in April.”
The Qatari minister, whose country is one of the world’s leading producers of liquefied natural gas, said prices are likely to rise again, having plunged from their heights after Russia’s invasion of Ukraine reduced supplies.
“The only thing that saved humanity and Europe this year was a warm winter and the slowdown in the economy worldwide,” al-Kaabi said. “If the economy comes back in 2024, the worst is yet to come.”
Another member of the Saudi cabinet, Investment Minister Khalid Al-Falih, said that the Middle East has become a haven for investors amid the economic slowdown elsewhere.
“When you look at the world today, where is there a region that looks as bright in the midst of this turbulence – political stability, economic stability, currency stability, energy stability in terms of the availability not only of fossil fuels but increasingly renewables?” Al-Falih said.
Michael Bloomberg, the financial information company’s founder and former New York City mayor, opened the Qatar conference with brief welcoming remarks. A day before, he was in the UAE to address the fossil-fuel issue as both a billionaire philanthropist and his appointed position as the U.N. special envoy on climate ambition and solutions.
Appearing with COP28’s president-designate Sultan Al Jaber, chairman of the Abu Dhabi National Oil Company, Bloomberg pledged financial support from his philanthropic foundation to help the U.N.’s International Renewable Energy Agency accelerate the transition to clean energy sources in emerging markets and developing economies. He said the task is “an urgent necessity and doing it requires strong partnerships across the public, private and nonprofit sectors.”
Al Jaber said the partnership between Bloomberg Philanthropies and IRENA will “champion innovation and deliver clean energy, climate action and economic prosperity for emerging markets in the Global South.”
Following the conference, Bloomberg published a column defending Al Jaber against members of the U.S. Congress and other critics who say an oil industry executive should not be leading the U.N. climate conference.
“Climate change is an epic challenge,” Bloomberg wrote. “We need all the allies — especially in the oil and gas industry — we can get.”
Also at the Doha conference, Mansoor Al Mahmoud, CEO of the Qatar Investment Authority, said the $450 billion sovereign wealth fund sees new opportunities in the private credit market as an alternative to commercial banks.
“Normally, an institution like us, who are very liquid, have a very long-term risk appetite for these type of investments,” he said. “I would advise for the next one year that the credit space is an interesting place to deploy some investments.”Al Mahmoud also said he’s not worried about fallout from the collapse of Credit Suisse, in which the QIA was a prominent backer.
“Just because of what happened with Credit Suisse it doesn’t mean that all banks will have that issue,” he said. “We are a very mature institution and managing the risk and expecting the risk is part of our job and part of our bread and butter.”
Among other speakers at the conference in Qatar, which wrapped up Thursday, were Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan; Hungarian President Viktor Orbán; Kristalina Georgieva, managing director of the International Monetary Fund; Boeing CEO David Calhoun; Standard Chartered Group CEO Bill Winters; Goldman Sachs sustainability chief Dina Powell McCormick; Thiel Capital Managing Director Jack Selby; and PwC Global Chairman Bob Moritz.