The oil sector faces a “crisis of perception”, Saudi Aramco’s chief warned an industry conference in London on Tuesday.
Amin H Nasser described a “worrying and growing belief among policy makers… and many others that we are an industry with little or no future”.
He dismissed as “hype” projections of a rapid shift to electric vehicles and its corollary, peak oil demand, as an “exaggerated” theory, in a speech to International Petroleum Week.
The head of the world’s largest oil company had been rattled a month earlier by conversations with senior financiers at the World Economic Forum in Davos.
Nasser recalled how one had confidently predicted the demise of the industry in five years and another that half of vehicles on the road would be electric within 5-10 years.
“These views are not based on logic and facts, and are formed mostly in response to pressure and hype,” he said. “But they are sincerely held.”
To counter the sector’s reputational problem, Nasser said it needed to reduce the carbon footprint of its products, touting his company’s reductions in carbon intensity.
The idea that oil demand will peak as emissions curbs and clean technology kick in globally is gaining traction – albeit with widely varying estimates of when it might happen.
Oil major Shell has suggested the peak could come as soon as 2025, if governments meet the spirit of the Paris Agreement on climate change. Others see the tipping point after 2040.
How quickly electric vehicles take off, in combination with car-sharing clubs and self-driving technology, is seen as a key variable. Nasser cautioned that passenger vehicles only account for 20% of oil demand and in other sectors – planes, ships, trucks, petrochemicals, and lubes – alternatives to oil are less evident.