ABU DHABI • The Riyadh-based International Energy Forum (IEF) has called on companies to raise investment in oil and natural gas production to US$523 billion (S$714 billion) a year by the end of this decade to prevent a surge in energy prices and economic unrest.
The think-tank's comments echo those of Saudi Aramco, whose chief executive on Monday said there could be "chaos" unless governments stopped discouraging investment in fossil fuels.
The IEF said spending on oil and gas projects slumped 30 per cent to US$309 billion last year and had only recovered slightly this year. It needs to reach US$4.7 trillion over this decade as a whole to meet demand, according to the organisation's forecasts.
"The next two years are critical for sanctioning and allocating capital towards new projects to ensure adequate oil and gas supply comes online within the next five or six years," the IEF said in a report. "Insufficient upstream investment would result in more price volatility and spur adverse economic consequences."
That is at odds with what most climate activists and some major energy bodies say is necessary to slow the warming of the planet.
The International Energy Agency, which advises rich countries, has called for the cessation of new investment in fossil fuels if the world is to neutralise carbon emissions by 2050.
The Organisation of Petroleum Exporting Countries and companies such as TotalEnergies have said it will be years, if not decades, before renewable forms of energy can fully replace oil and gas.
They have said oil's surge this year to more than US$70 a barrel could continue without more money being put towards fossil fuels.
"Publicly admitting that oil and gas will play an essential and significant role, during the transition and beyond, will be hard for some," Aramco chief executive Amin Nasser said at the World Petroleum Congress in Houston. "But admitting this reality will be far easier than dealing with energy insecurity, rampant inflation and social unrest if prices become intolerably high."
Oil steadied after a two-day rally as an industry report pointed to the biggest gain in stockpiles at a key US storage hub since February. Futures in New York traded near US$72 a barrel after closing 3.7 per cent higher on Tuesday.
The American Petroleum Institute reported crude inventories at Cushing rose by 2.4 million barrels last week, according to people familiar with the matter.
That would be a fourth weekly gain and the largest increase since the week ended Feb 19 if confirmed by government data, due later yesterday.