Energy This Week

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Oil prices regain some ground but sentiment weak

Oil prices have recovered about half their recent swoon, Brent crude closing at $74.1 per barrel on Tuesday, above the near-three year low of $69.19 last Tuesday, but still well down from more than $80 per barrel in late August. The problems were highlighted on Thursday, when the International Energy Agency cut its demand forecast by 70,000 barrels per day to 900,000 bpd, highlighting a “rapidly slowing” Chinese economy, alternative fuel vehicles in the world’s second-largest economy, and “tepid at best” demand growth elsewhere. Opec lowered its forecast on Wednesday, though at two million bpd it remains well above the IEA’s. The departure of Hurricane Francine from the US Gulf of Mexico eased supply worries on Friday, while the market seems unworried by the loss of Libyan oil exports as its central bank crisis continues.

Sheikh Khaled bin Mohamed’s visit highlights India’s energy role

The official visit of Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi, to India has been complemented by stronger ties and several energy deals . Urja Bharat, a joint venture between state companies Bharat Petroleum and Indian Oil, was awarded a production licence for Onshore Block 1 in the Ruwais area in Abu Dhabi, having been exploring the area since 2019. And a preliminary 15-year agreement between Adnoc and Indian Oil provides for the supply of one million tonnes of liquefied natural gas per year, which in combination with an existing deal would make the Indian company the single largest customer for Adnoc’s LNG.

As China’s energy appetite diminishes, India is emerging as the critical growth area for Gulf energy exports. Emerging economies are now the main suppliers of commodities, Dr Thani Al Zeyoudi, UAE Minister of State for Foreign Trade, told the Hili Forum in Abu Dhabi. The value of the global commodities market, including oil, gas, metals, agricultural products and others, is expected to more than double to $136.8 billion by 2029, from $63.9 billion in 2018.

Fuel cartels are preventing any solution to Lebanon’s long-running electricity crisis, which brings high costs, widespread blackouts, pollution and cancer.

The EU has made progress on its difficult operation to salvage the burning oil tanker MV Sounion, which was attacked in the Red Sea by Houthi forces from Yemen on August 21. The aim is to take the stricken ship to a safe harbour, probably in Saudi Arabia, to avoid a disastrous oil spill.

UK oil and gas industry fears slump

Mubadala Energy has followed up success in exploring for gas in Indonesia by securing the Central Andaman block, in deep waters north of Sumatra, in partnership with London-based Harbour Energy. But the UK’s oil and gas sector looks in less good shape: output could halve by 2030 because of the government’s plans to increase taxes on the industry.

Northern Emirates solar promises to cut consumer bills

Residential solar panels in the Northern Emirates could save customers money in a new scheme from Etihad Water and Electricity and the Ministry of Energy and Infrastructure. The panels’ output will be offset against consumers’ use, with a limit for this year of 20 megawatts of installations.

The UAE’s electricity mix reached 27.8 per cent from clean sources last year, Suhail Al Mazrouei, Minister of Energy and Infrastructure, said. This progress came as the Barakah nuclear plant approached full operations, and solar power expanded. The Middle East could be a crucial player in the artificial intelligence revolution, using its resources of solar, wind and nuclear power, a World Economic Forum official told The National. Electricity demand for data centres could more than double by 2026 versus 2022, finds the International Energy Agency.

British oil company BP, meanwhile, intends to sell its US wind power business, thought to be worth about $2 billion, while it focuses more on solar. Like its European peers, BP has struggled to achieve sufficient profitability in renewables, and is now re-emphasising its oil and gas activities as its valuation lags US rivals.

Charging points boost UAE’s green mobility

The National’s Business Extra podcast explores electric vehicle charging and how adoption is progressing in the UAE, as a report from consultancy Roland Berger says that the Middle East is a promising area, despite EVs running into some headwinds elsewhere. Al Futtaim Electric Mobility Company, a vehicle distributor subsidiary of the UAE business group Al Futtaim, finds that savings on fuel and the growing availability of charging points is boosting EVs’ popularity in the country. One example, the new Kia EV6 GT, scores well on range, space, sustainability and performance in The National’s review.

The UAE’s General Civil Aviation Authority has agreed with Hong Kong-based Volar Air Mobility to develop the nation’s first green aviation technology centre. Measures to reduce air travel’s emissions include sustainable aviation fuels, as well as emerging technologies such as electric air taxis.

Taqa is using more efficient desalination technology, efficient distribution and use, and increasing recycling of wastewater, to help meet the Middle East’s growing need for reliable water, writes the utility’s chief executive of generation, Farid Al Awlaqi.

Cop29 needs to build on the UAE Consensus

Sheikh Abdullah bin Zayed, Deputy Prime Minister and Minister of Foreign Affairs, has emphasised the need for Cop29 in November to build on the UAE Consensus reached at last year’s Cop28 climate talks in Dubai. The Cop29 host, Azerbaijan, has asked the UAE to help to steer discussions on climate and health, along with the UK, Egypt and Brazil, being the most recent and upcoming Cop hosts. Cop28 included the event’s first-ever day devoted to health. Climate change brings numerous health-related problems, including air pollution and the spread of tropical diseases.

Under the newly-elected Labour government and Foreign Secretary David Lammy, Net Zero Minister Ed Miliband, and Environment Minister Steve Reed, the UK will appoint special envoys for climate and nature, ahead of Cop29 as well as UN biodiversity talks in Colombia next month. And the EU has reappointed Dutch politician Wopke Hoekstra as its climate commissar.