Ampol chief executive Matt Halliday said the big oil producing nations in the Middle East were preparing for a global recession to hit demand which was likely behind last week’s vow to slash oil output.
The Organisation of Petroleum Exporting Countries (OPEC) signalled last week that its members would collectively reduce production by 2 million barrels a day with the cuts to take effect in November.
The cuts would reduce global oil supply by 2 per cent at a time of high oil prices with benchmark Brent Crude fetching the historically high price of $US95.89 a barrel on Tuesday.
At such levels, the oil price is 47 per cent higher than the price Woodside Petroleum assumed when it decided to push ahead with the Scarborough liquefied natural gas (LNG) project in November 2021.
Mr Halliday told the Australian Financial Review Energy & Climate Summit that geopolitics had always played a big role in oil prices but would increasingly do so in the future.
“That is likely to drive real volatility and higher energy prices and fuel is not immune from that,” he said.
“You can see from their (OPEC) point of view they are saying ‘how do we protect price’ and you can see the economy has some challenging times ahead, so they are looking to cut in anticipation of the global economy entering recession,
“I think you can see the lines are divided in terms of what the US and the West might be looking to achieve from an energy price point of view, and an inflationary price point of view, and what the OPEC countries are trying to achieve.”
Electric vehicles
Mr Halliday predicted that electric vehicles would make up about 15 per cent of the Australian car fleet in 2030 and demand for the petrol that his company sells was likely to remain firm until some time in the 2030s.
He said Ampol customers would look for a range of solutions beyond fossil fuels, from hydrogen to sustainable fuels to charging stations for electric vehicles.
Mr Halliday also said that there would still be a place for service stations in a future when motorists had stopped burning fossil fuels, but work would need to be done to connect Ampol’s distribution network to the electricity grid.
“You want to make this experience a very positive one for the consumer, so having the convergent location, having access to food, having access to convenient services is all part of what the consumer is looking for when they go and fast charge their vehicle,” he said.
Extracted from AFR