The following is the full text of Mr. Barkindo's address: 

Your Excellency,

Distinguished delegates,

I am deeply honoured to be asked to deliver a keynote address at this prestigious event.

I understand this event is one of the largest of its kind in the Middle East, and I laud your hard work in continuing this important initiative in spite of the restrictions caused by the COVID-19 pandemic.

Your programme includes important topics of the day, including the impact of the pandemic on the future of the oil and energy industry, a topic that has been keeping all of us very busy these last days. I also noted that you have included in the discussions the role of international cooperation in the post-pandemic area, which is I believe a topic of critical importance for the entire industry.

Ladies and gentlemen,

I still remember with great fondness my last visit to IR Iran in 2019, when I attended the 24th Oil, Gas, Refining and Petrochemicals Exhibition. Your hospitality was unforgettable, including trips to various religious sites near the capital of Tehran and a delightful dinner hosted by His Excellency His Minister Bijan Zanganeh.

At that time I also noted and was duly impressed by what your country has achieved in the face of severe sanctions. I truly hope to return to IR Iran and meet face-to-face, when travel is safe once again.

I want to thank IR Iran for its role in making our collaboration under the Declaration of Cooperation a great success. As a Founder Member of OPEC, we have always counted on you for your support and continue to do so today.

I want to especially thank Minister of Petroleum Bijan Namdar Zanganeh, our longest-serving minister, whose sage advice and powerful presence at our negotiating table over decades has been critical for the achievements and continuity of our organizational strive towards market stability.

The Declaration of Cooperation recently celebrated its fourth year, a landmark we can all look upon with pride. Members also signed the Charter of Cooperation in 2019, giving us a new platform for collaboration beyond the important market-balancing process into longer-term challenges as well.

The group of dedicated producers in the Declaration, of which IR Iran is an essential component, was able to restore market confidence and stability during the 2014-2016 market crisis. The experience and accomplishments gained during this downturn proved to be crucial in quickly gearing up to manage the pandemic in 2020.

Since the pivotal 10th (Extraordinary) OPEC and non-OPEC meeting last April, the Declaration of Cooperation group has taken unprecedented steps to prevent a market collapse, restore stability, and breathe life back into the industry. The rapid, decisive and unwavering actions taken to help the market on its road to recovery is sure to occupy a dense chapter in oil history books.

All OPEC and non-OPEC participants can be proud of what we have done – together – in the face of an unparalleled crisis.  World leaders and energy stakeholders everywhere have commended our commitments and achievements. They continue to look to us in the face of calamity.

Without our base in place, the situation would certainly have been far worse. We continue in our labours, adjusting our decisions month-by-month to ensure energy security during the fragile period still facing the market in the coming months as the world fiercely battles to wrestle this mortal enemy – COVID-19 – to the ground.

A bright spot has come with the start of immunizations, but rapidly increasing infection rates and faster-spreading strains of the virus are likely to drag on the strong recovery this year. Nonetheless, we do believe that the worst is over!

Ladies and gentlemen,

Our predicted oil demand for 2021 stayed unchanged from the previous month in our January Monthly Oil Market Report, rising by 5.9 mb/d to average 95.9 mb/d. Meanwhile, growth was revised slightly higher for 2020 to a decline of 9.8 mb/d to average 90 mb/d — an unprecedented overall decline of about 10 per cent. OECD Americas displayed poorer performance than expected over 2020, especially the US, while China and India saw better-than-expected figures due to stronger gasoline and petrochemical feedstock requirements.

With the market currently switching into backwardation, we are hopeful that 2021 will be a good year. In fact, we see the global economy growing by about 4.4 per cent, which is a big leap from the minus 4.1 per cent witnessed in 2020, which will have a positive knock-on effect on oil consumption.

It is equally important to examine the long-term, post-COVID outlook for the industry, thus I will presently turn to this topic. Indeed, despite what some naysayers put forth, we see a bright future for our industry.

In our most recent World Oil Outlook for 2020, launched in October of last year, we incorporated the effects of the pandemic as much as possible. As stated in the WOO, “The pandemic’s impact and resulting containment efforts precipitated one of the most tumultuous periods in the history of oil.”

However, despite the large drop in 2020 and the resulting scramble by the industry to cope with massive losses of up to 30 per cent of oil demand in April — the sharpest downturn in living memory — we are optimistic about the future. In fact, global primary energy demand is forecast to continue growing in the medium and long term, rising by a substantial 25 per cent in the period to 2045.

I have always stood by the belief that all forms of energy will be needed to sustain the post-pandemic recovery and cover future energy needs. I stand by this today. Indeed, we see oil retaining the largest share of the energy mix throughout the outlook period — more than 27 per cent in 2045.

Natural gas will remain the second-largest contributor to the energy basket in 2045, and the fastest-growing fossil fuel between 2019 and 2045

at 25 per cent.

We see ‘other renewables’ — mainly solar, wind and geothermal energy — continuing to have strong performance over this period, growing by 6.6 per cent per annum on average, faster than any other source of energy.

The medium-term horizon sees healthy oil demand growth rates, with demand projected to increase from nearly 100 mb/d in 2019 to around 109 mb/d in 2045. Most of this will come from non-OECD countries, while OECD countries will see demand plateau at around 47 mb/d to 2025 before beginning a longer-term decline towards 35 mb/d by 2045.

Non-OECD countries, on the other hand, are projected to see a demand rise of 22.5 mb/d from nearly 52 mb/d in 2019 to 74 mb/d in 2045. Of these, India is expected to be the largest contributor to incremental demand, adding around 6.3 mb/d in this time frame.

Ladies and gentlemen,

This period will not be without serious challenges. We have concerns about investment, particularly in light of the pandemic. The industry was still recovering from the blow of lost investment from the 2014-2016 downturn when COVID-19 struck. We have seen investment falling over 2020 by about 30 per cent, even more than the annual drop during the last downturn.

According to our assessment, the global oil sector will need cumulative investment of $12.6 trillion in the upstream, midstream and downstream

through to 2045. Underinvestment at this time could sow the seeds for extreme volatility down the road.

Social, political and economic pressure for institutional divestment in fossil fuels under a health, safety and environment (HSE) drive is on the rise in an effort to slow climate change and fulfil aims set forth by the Paris Agreement. For example, the European Investment Bank, the world’s largest international public lending institution, adopted a strategy to end funding for new, unabated fossil fuel energy projects from the end of 2021. Others are sure to follow.

However, there is evidence that divestment may actually cause emissions to rise, as less reputable energy operations could come in to fill the gap. Furthermore, the oil industry has a long history of creating technology leaders. And indeed, promising advances through technology are already providing the path to lessen and eventually eliminate emissions through such means as carbon capture and storage and blue hydrogen, among others. These industry leaders must continue to find ways to reduce emissions while supporting sustainable energy supplies and access to energy for all.

All sources of emissions, along with their environmental impact, must be examined over the lifetime of commodities in order to determine their real footprint. It will then be necessary to level the playing field and have all emitters address the challenge in order to find fair and practical solutions to addressing climate change while supporting those who suffer from energy poverty. 

Ladies and gentlemen,

The past year has been a horror for many on the personal front. Many have lost family members and loved ones to COVID-19. Many have seen their livelihoods torn away and faced financial ruin. The oil industry has seen deep holes torn into budgets and investment plans set back or cancelled.

But 2021 is a new year filled with hope. With the oil market relatively steady, our production adjustments are now intended to support the global recovery. High overall conformity levels in 2020 contributed significantly to market rebalancing and stability. Our partners remain determined to continue to meet their compliance promises going forward.

We have learned once again in 2020 — in dramatic fashion — the power of multilateralism. The challenge presented by the pandemic has been greater than any single country, producer or company could shoulder. The benefits of standing together and staying a course have become abundantly clear.

As the great poet Jalāl ad-Dīn Muhammad Rumi said, “Where there is ruin, there is hope for treasure.”

We are proud to be part of this market-leading effort, which has helped restore stability and confidence in the oil market. Let us now focus together on continuing to navigate through these tough times and facing future challenges as a united group in the long-term interest not just of our Member Countries, but energy stability as a whole.

Thank you.