What was said about oil at the economic forum in Davos

Today is the last day of the annual meeting of the International Economic Forum in Davos, Switzerland. This year, key global figures spoke under the motto “Globalization 4.0”. As always, they considered the main global trends, tried to propose solutions to problems that are already painful or imminent, and also boasted about achievements. Energy contains all these mentioned reasons to talk about it.

We chose the most interesting statements, voiced at the annual meeting of the Forum, concerning oil. Despite the increasing attention to renewable sources, storage systems and electric cars, this “traditional” energy source is not written off, but even vice versa.

The main actors were the leadership of the International Energy Association (IEA), OPEC and major oil companies.

Interesting fact:

“To buy a basic membership in the International Economic Forum, companies need to pay $60 thousand (2017 prices). To get a "premium" corporate membership – 10 times more. Membership in the Forum means that the CEO of the company can visit Davos, but he will still have to buy a ticket”


  • “We will pump out the last barrel of oil!” – the Head of Saudi Aramco, Amin Nasser

In Saudi Arabia, they believe that the world's oil reserves will run out with the last man on earth. And they do not think that the decline in demand for oil will happen in the near future, despite the growth in renewable energy.

Oil may have a smaller share in global energy consumption in the future, but in absolute terms, demand for oil will continue to grow.

“I do not think that the peak of demand will come in 10 years, or even in 2040”, said Amin Nasser, the Head of Saudi Arabia’s largest oil company, Saudi Aramco.

“The demand for oil will continue to grow ... We are the oil producer with the lowest production cost, and the last barrel will enter the market from our region”.

According to the new independent audit (January 2019), oil reserves in Saudi Arabia are estimated at 268.5 billion barrels –  the second place after Venezuela. Today, the kingdom produces about 10.5 million barrels of oil per day. Whereas in November they produced 11 million barrels per day. The reduction is explained by the agreement of OPEC countries and their partners, taking into account Russia, to reduce production volumes in order to stabilize prices.

  • “I did say!” –  Fatih Birol, the executive director of the International Energy Agency, IEA

Last year, the executive director of the International Energy Agency (IEA), Fatih Birol, made a loud forecast, which came true (and this is not a common case). The forecast was that the US will increase oil production in 2018.

“We made a very bold forecast and many people said that this was too radical. I noted that we would reconsider it... and we revised it upwards”, he said in a panel discussion.  

“If someone thinks that we are fully aware of the influence of the evolution of shale, then he is greatly mistaken”.

 Last year, the United States became the largest oil producer, surpassing Russian and Saudi Arabian production. Production volumes increased by more than 2 million barrels per day – the largest increase in volumes in history among all countries of the world.

  • “Oil and gas will stay with us for a long time”

This was also stated by Fatih Birol from the IEA (International Energy Agency). He noted that humanity must learn to use these resources more efficiently.

Birol is confident that the Middle East will remain the largest exporter of oil for many years. Despite the fact that the US produces a lot of its own oil, most of it is used for domestic consumption.

‘Shale oil is not Saudi Arabia” – the Head of the oil company Hess Corporation John Hess

“Shale oil is not Saudi Arabia. This is a very important but short-term resource”, said John Hess, CEO of Hess Corporation, one of the largest US oil companies.

According to him, due to shale oil, it is possible to increase oil production in the United States to 15 million barrels per day. “The share of shale oil in total oil production is 6% now, it can be increased to 10% by the middle of the century, but then its share will level off”, said the Head of the oil producing corporation.

Over the past 3 years, the share of shale production in the global investment portfolio grew by 70%, but investments in other sources of production fell by 40-50%:

“We need long-cycle projects to correlate with projects with a short cycle to make development sustainable”, says John Hess.

  • “So far, so good. And today Trump is the largest producer of hydrocarbons in the world” –  the Head of OPEC Mohammed Barkindo on agreements with the Russian Federation and the United States

About how strong are the agreements between OPEC and its partners, said the Head of OPEC, Mohammed Barkindo:

“We agreed that, firstly, we are working to stabilize the oil market, and not only for producers (which we need very much), but also for consumer countries. Then I think both parties are on the same side”.

To the remark that Donald Trump is still on the opposite side, Barkindo replied:

“Donald Trump is the largest producer of hydrocarbons in the world today... Some of us communicate our thoughts clearly, others are less clear. Sometimes Donald Trump is 3 to 5 steps ahead of us in deciphering his tweets”.

  • “Investors have burned themselves and will be more cautious now” – Vicky Hollab, Chief Executive Officer of the American oil and gas company Occidental Petroleum

Vicky Hollab shared such an idea by answering a question about the forecast price for oil, which, by the way, is $60-70 per barrel.

Price volatility will be higher than last year, as there are still many inaccuracies about the development of the global economy, and negotiations between the US and China, in particular.

But investors are looking not only at these factors, and not at agreements between OPEC countries, but at world oil demand.

“Oil prices depend on demand. And investors have burned themselves in the past with market volatility, so now they will invest more carefully”.

  • “There is no peak demand for oil on the horizon” – OPEC head Mohammed Barkindo

“Demand continues to grow steadily. Our forecasts (short-term) are growth by 1.4-1.5 million barrels per day”, said the Head of OPEC Mohammed Barkindo.

“In our forecasts until 2040, oil will continue to dominate the energy basket and our forecasts do not differ from those of the IEA”.

“Today, the key driver is transport - cargo, aviation. And today we heard the statistics that 82% of the world's population has never flown by planes. Therefore, there is a huge stock of growth for demand”, added the Head of OPEC.


In general, representatives of the oil industry, who participated in the panel "New Energy Equation", expressed that oil cannot be shaken by increasing the share of electric vehicles in motor vehicles and creating more efficient fuel combustion systems on carbon machines. The world population is growing, the economic condition of developing countries is also improving, so the demand for oil will grow.

  • The main “silence” of the forum

Saudi Minister of Energy Khalid Al-Falih at the last moment canceled his visit to the Forum. He was supposed to perform in the panel on Wednesday.

So far, the reasons why Al-Falih decided not to attend are unknown. But he joined the long list of other high-profile shirkers this year. Russian Energy Minister Alexander Novak also did not come to the Davos forum. Other high-ranking guests also canceled their visit: US President Donald Trump, British Prime Minister Theresa May, French President Emmanuel Macron, Chinese President Xi Jinping. The reasons are different - from recent political defeats to protests on the streets.

The full panel discussion video 


Tags: oil, hydrocarbon production

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