Energy prices: Ex-BP boss sees threat of new spike this winter and defends oil’s future role
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A former chief executive of BP has told Sky News there remains a threat of an energy price spike this winter while defending the role oil and gas will play in the transition towards net zero.
Bob Dudley was speaking to Business Live with Ian King while attending an event in Abu Dhabi on tackling climate change ahead of the annual COP summit, to be held in the oil rich UAE, in just under two months’ time.
The American, who led BP’s recovery after the Gulf of Mexico oil spill for 10 years until 2020, is contributing to the debate on how to accelerate action to decarbonise and future-proof the world’s energy system.
Mr Dudley is there in his capacity as chairman of the Oil and Gas Climate Initiative.
That comprises 12 of the world’s biggest energy companies including Exxon Mobil, Chevron, Shell, BP and TotalEnergies as green energy solutions continue to be sought to ensure the global net zero target of 2050 is met.
Energy firms were excluded from the debate at COP26 in Glasgow.
Mr Dudley told the programme that while oil and gas would continue to be part of the mix, it was essential that existing and evolving technologies secured investment to cut emissions at a time of an increasing global population and rising demand for energy.
“We need the things to provide the heat, light and mobility, no matter what the forms of energy we need to do that,” he said.
“It’s not just oil and gas, there are people who don’t want to see nuclear, which is one of the cleanest forms.
Climate change protesters targeted BP’s annual shareholder meeting in April
“We should do as much renewables as we can, need to further bring along hydrogen.
“I hope policymakers and governments won’t try to pick the winners of the technologies because we’re going to need to experiment in different parts of the world with many things… Hydrogen, biofuels, ammonia.”
He was speaking as the global oil market faces volatility ahead of the northern hemisphere winter, raising supply versus demand questions following a spike in prices since the summer.
They were largely blamed on production cuts by output leaders Saudi Arabia and Russia.
A barrel of Brent crude oil was trading at just over $70 in July and has neared $100 over the past few weeks, threatening to exacerbate the West’s inflation problem in the wake of Russia’s war in Ukraine.
Brent stood at $90 on Tuesday.
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“The world is increasing in its energy demand”, Mr Dudley said, explaining that the US economy had weak inventories while demand was growing while the same could not be said for China, the next biggest economy, where activity was weak.
“The oil price… it’s a little bit high now, there’s going to be some pain on countries like India but all forms of energy we’re going to see the same thing in the winter in Europe we saw last year. Quite possibly that could happen again this year as well.”
“We need to get going. Clean energy, affordable energy and now there’s the new one after the invasion by Russia of Ukraine, now energy supply is on everyone’s mind as well.”
Mr Dudley also told the programme that BP’s interim CEO had told delegates there would be no course adjustment on its climate ambitions following the shock departure of his own successor, Bernard Looney, last month.
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