Green energy will capture most of the energy market within the next two decades, according to Hatem Al Mosa, CEO, Sharjah National Oil Corporation (SNOC).
Al Mosa believed it is “only a matter of time” before renewables control the market as “it has been increasing its supply at a much higher pace than the fossil fuel industry”.
“I believe that by 2030 the price benchmark will be set by renewables – not by supply and demand – because they will be the main competition for oil and gas,” he said during an interview with Oxford Business Group as part of its ‘Covid-19 economic impact assessment’ series.
“It is already much cheaper to produce green energy, and it will only get cheaper with time.”
However, for the moment, he has warned authorities seeking oil prices above $50 per barrel could prompt shale producers to return too early to the market.
“Given the true cost of oil, this would not be healthy for the market,” he said during an interview with Oxford Business Group as part of its ‘Covid-19 economic impact assessment’ series.
Earlier this month, OPEC+ members agreed to a one-month extension of its record output cuts and adopted a stricter approach to ensuring members don’t break their production pledges.
After a video conference lasting several hours, delegates said all nations had signed off on a new deal for a production cut of 9.6 million barrels a day in July – 100,000 barrels a day lower than the reduction in June because Mexico will end its supply constraints, but a tighter limit than the 7.7 million barrels a day set for July in the group’s previous agreement.
Al Mosa said: “As the market starts to recover, cuts should be gradually reduced to target pre-Covid-19 production levels, at which time it should respond naturally and allow shale production to come on-line.”
He believed a “healthy price range” for June to October would be between $35 and $45, climbing up to $50 by mid-2021, if demand continues to recover.
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