Energy Minister Prince Abdulaziz Bin Salman is dissatisfied with the International Energy Agency's (IEA) current blockbuster study presenting a road map for the global community to reach net-zero carbon emissions by 2050.

"I had to convey my belief that this is a sequel to [the] La La Land movie," Prince Abdulaziz told media on June 1 after OPEC+ ministers gathered to confirm output levels through July. "Why would I take it seriously?"

As per the IEA's road map, if the world were to reduce carbon emissions to net-zero levels within the next three decades, global oil supplies would have to fall by more than 8% a year, to 24 million b/d in 2050, from pre-pandemic levels of just over 100 million b/d. This indicates that no new upstream oil and gas projects should be built.

But it isn't just the IEA that's causing havoc in the oil business. Under environmental stress from regulators, climate change campaigners, and investors, IOCs are reducing substantial portions of their oil and gas holdings.

In late May, shareholders at ExxonMobil and Chevron handed strong rebukes to the firms for their sustainability goals, whereas a Dutch court issued a historic judgment directing Shell to reduce its emissions.

Saudi Arabia, the world's largest petroleum exporter and owner of the world's most valuable business, Aramco, has no existential concerns, according to Prince Abdulaziz.

In April 2020, while the global oil market collapsed due to the pandemic and Saudi Arabia waged a price war against OPEC+ ally Russia over production policy, Prince Abdulaziz directed Aramco to increase crude production capacity to 13 million b/d from its current 12 million b/d, excluding the Neutral Zone the Kingdom shareholdings with Kuwait.

Aramco, which also has exclusive rights to extract crude within Saudi Arabia, is now doing engineering studies on how to accomplish the goal, which would come at costing hundreds of millions of dollars.

"Don't be shocked if we make more declarations" about future expansions, Prince Abdulaziz added, declining to specify.

OPEC, of which Saudi Arabia is the largest producer, has cautioned that if nations adopt the report's recommendations, the oil market would be weakened and fossil fuel investment will be imperiled, threatening the economy of its members.

"The assertion that neither new oil nor gas investments are required after 2021 contrasts sharply with findings frequently expressed in other IEA reports and can be a potential source of instability in oil markets if accompanied by some investors," OPEC said in a survey to members obtained by S&P Global Platts.

"Whereas the [net zero] circumstance appears overly ambitious in terms of assumptions and results, it will undoubtedly influence investment decisions, which may mitigate demand (growth) for fossil fuels, like oil and gas, because all policymakers and oil and gas companies use IEA's circumstances for strategic planning," OPEC added.

Saudi officials, which include Aramco CEO Amin Nasser, have stated repeatedly that people anticipate oil to remain a dominant source of energy for generations to come, and that the company's production costs are one of the lowest in the economy, amounting to the country's massive and comparatively readily available crude deposits.

This renders Saudi Arabia a potential survivor, even though peak demand circumstances play out and global oil demand declines. As per BP's most recent data available evaluation, the nation still has 300 billion barrels of proven oil supplies far above Russia and the United States. Saudi oil reserves will last for more than 82 years based on an average 2019 output of close to 9.8 million b/d.

In contrast, most European energy companies already are preparing to reduce existing oil and gas inventories and migrate to renewable energy in the next years to help reduce emissions.

With increased shareholder activism forcing listed Western energy corporations to abandon fossil fuels, market observers feel that state-run oil giants like Aramco, which were less susceptible to public pressure, are well-positioned to make up the shortfall.

Although Aramco has reduced its CAPEX budget for 2021 because of the economic pressures imposed by the epidemic, Saudi authorities believe that increased production capacity is indeed a strategic goal.

Saudi Arabia is the market's leading swing manufacturer, with the most readiness among manufacturing nations to restrict its taps to avert price falls while simultaneously releasing excess capacity when supply is limited.

As per Prince Abdulaziz, Saudi Arabia produced 8.48 million barrels per day in May, increasing to 9.49 million barrels per day in July under the OPEC+ supply agreement.

Though oil accounts for the great bulk of Saudi Arabia's earnings, the kingdom is also investing in alternative energy, he added, to maintain a balance between capitalizing its hydrocarbon resources and becoming an ecologically conscientious government.

In recent years, the Kingdom has launched multiple solar projects, such as the 300-MW Sakaka solar power plant, first-ever utility-scale renewable development, and billions of dollars of funding in hydrogen facilities.

"Saudi Arabia is no longer an oil country; it is an energy producer," Prince Abdulaziz stated.

"We are not only an energy nation, and we're a highly competitive energy nation, with minimal costs in producing oil, relatively low cost in generating gas, low costs in producing renewable energy, and we will unquestionably be the lowest-cost producer of hydrogen. I implore the world to embrace this as a fact. Each of these activities will be accomplished by us."