Dec 14, 2023 - Energy & Environment

Why oil titans are "positive" on COP28 deal

Illustration of a handshake in a graphic circle next to stacks of oil barrels

Illustration: Annelise Capossela/Axios

If the oil industry and petro-states fear the COP28 deal, they're certainly not showing it in public.

Why it matters: Responses signal they don't see the deal having a major impact on the market for their products — at least not for quite a while.

Catch up fast: The non-binding Dubai agreement calls on nations to transition away from fossil fuels.

  • But it omitted calls to "phase out" and doesn't seek to impose transition timing beyond calls for "net zero" in 2050.
  • Saudi Arabia and various other producing states opposed the popular "phase out" push.

What they're saying: American Petroleum Institute head Mike Sommers, posting on X, said all forms of energy are needed amid rising demand. He added delegates "realized too-far/too-fast mandates are unproductive."

  • "The pharaoh methodology of dictating things has been buried, and so people are free in their choices," Saudi energy minister Prince Abdulaziz bin Salman told Al Arabiya TV, per multiple outlets.
  • OPEC and the Gas Exporting Countries Forum, in a joint statement, applauded the "consensual and positive outcome."
  • European heavyweights Shell and Eni also praised the deal, per the NYT.

The intrigue: A Wood Mackenzie analysis flags the deal's statement that "transitional fuels" will play a role in a low-carbon shift while ensuring security.

  • They call that text "good for natural gas," given its role in balancing intermittent renewables. Bloomberg has more.
  • The agreement also name-checks carbon capture as a useful tool, which lines up with the industry's strategy.
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