Global oil prices fell on Monday after COP28 president Sultan Al Jaber hit back at criticisms of comments he made before the climate summit about scientific evidence of the need to phase down the use of fossil fuels.
In an online event in November, Al Jaber had reportedly remarked there was “no science” to support the idea that the reduction of the use of fossil fuels would help limit the global temperature increase to 1.5C — a key goal of climate change activists, and one of the central themes of COP28.
On Monday, day five of the climate summit, Al Jaber hit back, saying: “We very much believe and respect the science.”
He added: “I honestly think there is some confusion out there, and misrepresentation. I am quite surprised with the constant and repeated attempts to undermine the work of the COP28 presidency.”
Energy Markets Fall During COP28
Energy markets have not performed well during the first few days of the climate summit. Since the start of the event on Thursday, Brent crude has fallen 5.3% to $78.43 a barrel, while Nymex WTI lost 3% to $73.65 a barrel. The United States Oil Fund USO, an exchange trade fund that tracks the price of light sweet crude, has fallen 2% to $68.77.
Natural gas was also coming under pressure on Monday. The summit addressed the effect of rising levels of methane on climate change. Methane emissions are the second-largest cause of climate change, according to the International Energy Agency.
US natural gas futures were down 2.6% while the United States Natural Gas Fund UNG, an ETF that tracks gas prices, was down 1.1% in pre-market trade.
Oil Industry Lobbyist Hits Back
U.S. climate envoy John Kerry also spoke at COP28.
“Every decision we make should be geared to say: ‘Does this advance the 1.5 degrees goal, or is it going to be more destructive and take us in the wrong direction?’,” Kerry, a former Secretary of State, said.
The global oil industry, however, would have much to lose from a phasing out of fossil fuels. It is already faced with the transition to electric vehicles in the motor industry, and also from targets to increase the use of renewable energy sources by most major economies.
The American Petroleum Institute receives millions of dollars a year in funding from oil majors in, and outside, the U.S. The lobby group pushed back on calls to reduce dependence on fossil fuels.
“If our nation’s leadership is to grow, Washington must enact policies that support increased oil and natural gas investment in exploration and production as part of a balanced and reliable energy mix,” said Amanda Eversole, API chief advocacy officer.
Thus far, the oil majors have mainly responded to market fundamentals, falling as demand has failed to pick up during a predominantly mild autumn.
Exxon Mobil XOM is down nearly 13% since late September. Chevron CVX is down 14% over the same period and ConocoPhillips COP is off 6.5%.
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