Saudi Aramco said that next year, due to an increase in the number of trips and lack of investment, producers in the oil market will have reduced reserves.
Current production capacity is roughly 3-4 million barrels a day, said CEO Amin Nasser. As such, he projects that supply will decline as demand for jet fuel increases.
Aviation fuel is one of the latest petroleum products, but demand for it continues to plummet since the start of the coronavirus pandemic. According to the International Energy Agency, daily consumption of jet fuel and kerosene is around 5.5 million barrels, up from nearly 8 million in 2019.
Nasser also noted that in 2022, the total oil consumption may exceed 100 million barrels a day. The observed reduction in spare capacity is compounded by the fact that too few oil companies are trying to increase their production capacity.
These statements have pushed oil to record highs today.
Although renewable energy still could not meet the world's needs, demand for gas and oil continues to increase. This is why Aramco is investing heavily in blue hydrogen.
Nasser said the company is currently negotiating supply contracts with potential buyers in Japan and South Korea.
Blue hydrogen is produced by converting natural gas and capturing carbon emissions. Hydrogen is believed to be critical to the transition to cleaner energy as it only produces water vapor when burned.
Nasser said they need purchase agreements because they are huge investments.