The GCC needs to focus on investments in renewable energy & technology
§ DIFC hosts economic workshop on oil trade and finance
§ The future of global energy is based on renewable energy
§ Saudi Arabia uses more oil than Germany
DIFC, the global financial hub of the region between the regional emerging markets and the world, today held an economics workshop on latest developments in international financial markets and trade relating to oil and gas. The workshop, entitled “Oil Trade & Finance: Developments & Prospects for MENA”, brought together financiers, market specialists and business leaders, to discuss the emerging market trends and potential impact of unrest in the MENA region on energy supply & prices.
Dr Nasser Saidi, Chief Economist and Head of External Relations, DIFC Authority, said:
“As we enter the new decade, we are seeing a number of dynamic and fundamental changes to the global oil and gas industry. Firstly, risk premiums associated with global uncertainties, have pushed crude oil prices up again. Secondly, as emerging markets took the driver’s seat and became the main contributor to world GDP growth over the course of the global financial crisis, oil and gas flows have moved towards these emerging market economies, China in particular.
“Meanwhile, GCC petroleum consumption continues to remain high, with some states displaying the fastest yearly growth in energy demand in the world. Saudi Arabia actually uses more oil than Germany, despite having over 60 million less people. As a result of maintaining fuel subsidies, the GCC is extremely energy intensive when compared to industrial and developed countries around the world. This is not sustainable.”
The Middle East is home to two-thirds of the world’s oil and gas proven reserves and its role as the largest oil exporter underscores the importance of the region given the rising demand globally for energy commodities. Recent years and months have seen high volatility in oil & gas prices, unrest in the region and rising demand from emerging market economies, highlighting the importance of maintaining oil and gas supply and financing to sustain growth in times of uncertainty.
Dr Nasser Saidi continued:
“The future of global energy is not based on oil but rather on renewable energy, which is expected to triple by 2035. China is shaping this future and is pushing to expand the role of low-carbon energy technologies which will in turn drive the energy cost down, benefiting all countries. This is exactly why the GCC states need to focus on investments in renewable energy & technology given that they have significant clean energy resources in solar, wind and, carbon capture and storage.
“Today’s discussions are an opportunity to highlight the challenges faced by the sector and propose solutions to address them. DIFC is proud to be hosting this event and it is committed to continue to be a platform where economic and financial issues facing the region and the world are discussed in an effort to develop this region’s economies.”
The workshop addressed a series of topics, including “shifting energy market patterns and their consequences”, “the role of Dubai Mercantile Exchange and the regions oil prices benchmark”, “Middle East unrest & oil prices vulnerability”, “oil & gas Infrastructure in MENA region”, “investment in oil & gas Industry in the MENA region” and “the changing role of financial services regulators: DFSA and the commodity derivatives markets”.
Among the speakers were Dr. Nasser Saidi, Chief Economist, Dubai International Financial Centre Authority; Mr. Thomas Leaver, CEO, Dubai Mercantile Exchange; Mr. Jorge Montapeque, Global Director, Platts; Dr. Fabio Scacciavillani, Chief Economist, Oman Investment Fund; Ms. Sirine Tajer, Entrepreneur & Independent Strategic Advisor; and Mr. Gerald Santing, Managing Director, Dubai Financial Services Authority.
The Dubai International Financial Centre (DIFC) is financial and business gateway between the regional emerging markets and the world.
Since its launch in 2004, the DIFC has established a current client base of 792 firms which have registered at the Centre, including 16 of the world’s largest 20 banking institutions. Thousands of employees operate in an open environment complemented by international regulations, laws and standards. The DIFC offers its member institutions incentives such as 100 per cent foreign ownership, zero percent tax rate on income and profits and no restriction on capital convertibility or profit repatriation. In addition, the DIFC’s clients benefit from modern infrastructure, operational support services and business continuity facilities.