{"id":49923,"date":"2024-01-30T18:56:43","date_gmt":"2024-01-30T18:56:43","guid":{"rendered":"https:\/\/www.climatechangenews.com\/?p=49923"},"modified":"2024-01-30T18:56:43","modified_gmt":"2024-01-30T18:56:43","slug":"saudi-arabia-cancels-plan-to-raise-oil-pumping-cap","status":"publish","type":"post","link":"https:\/\/www.climatechangenews.com\/2024\/01\/30\/saudi-arabia-cancels-plan-to-raise-oil-pumping-cap\/","title":{"rendered":"Saudi Arabia cancels plan to raise oil pumping cap"},"content":{"rendered":"

Saudi Arabia has cancelled plans to raise the limit on the amount of oil it aims to produce, fuelling climate campaigners’ hopes the government will accept experts’ predictions of a peak in oil demand.<\/strong><\/p>\n

The energy ministry told state-owned oil giant Saudi Aramco not to go ahead with a planned increase of its production cap from 12 to 13 million barrels a day, the company announced on Tuesday.<\/p>\n

In a brief and unexpected statement<\/a>, the world’s biggest oil firm gave no reasons for the move. But some analysts speculated that the Saudi government’s faith in ever-growing oil demand may be declining.<\/p>\n

Saudi Arabia currently produces around 9 million barrels. A million barrels is just over 1%<\/a> of the world’s oil production and equivalent to that pumped out by medium-sized oil producers like Angola or the United Kingdom.<\/p>\n

Writing on the wall?<\/h3>\n

Oil Change International campaigner Romain Ioualalen said the decision shows Saudi Arabia “is starting to realise that the world meant it when it committed to “transition away from fossil fuels” at Cop28″.<\/p>\n

Linking it to the US decision last week to pause new gas export terminals, Ioualalen said “the era of unchecked fossil fuel expansion is over and we’re entering the era of renewable energy”.<\/p>\n

US government<\/strong> pauses new gas export terminals in \u2018historic win\u2019 for climate<\/a><\/p><\/blockquote>\n

Peter Wood, a strategist for oil producer Shell, said on X<\/a> that “the market doesn’t need more oil production capacity right now” but with oil wells coming to the end of their lives “that can change, even if oil demand [growth] slows”.<\/p>\n

But, while climate campaigners celebrated the signal, energy geopolitics researcher Francesco Sassi said<\/a> Saudi Arabia may just be trying to push up the oil price to balance its budget.<\/p>\n

Sassi also pointed out that over the last five years, Saudi Arabia has been burning less<\/a> of its oil for electricity domestically, as it ramps up gas and invests in renewables. That leaves it more to export.<\/p>\n

Carbon Tracker analyst Guy Prince pointed out that the new cap is still three million barrels above its current level so the country still has plenty of space to increase production.<\/p>\n

But he added that, if Saudi Arabia is serious about restraining oil production, that would be a good move for the country.<\/p>\n

“Considering that they’re looking to diversify their economy away from fossil fuels in the long term, it doesn’t make any sense to expand their existing production capacity,” he said.<\/p>\n

Opec vs IEA<\/h3>\n

For years, the Saudi-led Organisation of Petroleum Exporting Countries (Opec) has clashed<\/a> with the International Energy Agency (IEA) over whether oil demand will decline or not.<\/p>\n

The IEA predicts that, over the next five years, oil demand growth is “set to lose momentum…as the energy transition gathers pace, with an overall peak looming on the horizon”.<\/p>\n