Kuwait is starting its first offshore oil exploration and building the world’s biggest oil refinery, Kuwait Petroleum Corporation’s chief executive said on Tuesday. Kuwait is also committed to investing to meet increasing demand for hydrocarbons. “Kuwait can go higher than current output and is ready to meet any increases OPEC authorizes,” Sheikh Nawaf Saud Al-Sabah told the Qatar Economic Forum hosted by Bloomberg in the capital Doha.

Sheikh Nawaf said the company was supplying all customers, but that multinational oil firms were not matching the investment of national oil enterprises. He also said the first offshore rig had arrived in Kuwait and would begin drilling soon. “We have never touched the offshore in Kuwait. The first offshore drill rig arrived in Kuwait a week ago and will start soon,” he said. The new refinery would come online by the end of 2022, Sheikh Nawaf added. “It will be the largest refinery in the world at 615,000 barrels of oil a day capacity,” he said adding that it would help meet increased demand from Europe and elsewhere.

Sheikh Nawaf said there was a “dangerous trend”, with world consumers wanting energy but not being prepared for the change from polluting hydrocarbons to green energy. “That is a paradox here that is causing quite a tremendous disruption in the investment cycle. We are making the long-term investments, but not international oil companies.” Sheikh Nawaf said the world currently produces and consumes about 100 million barrels of oil a day but that the equivalent of Kuwait’s production – about 3.5 million barrels a day – was being lost through declining fields.

Sheikh Nawaf later said a $30 per barrel “war premium” has been built into the cost of oil. “I see a war premium of about $30 in the price right now,” he told Bloomberg TV on the sidelines of the forum. He also said European buyers are asking about more refined oil from the country, partly in anticipation of its Al-Zour refinery coming fully onstream. “We’re getting more calls for products,” he said. “By the end of the year, we’ll have about 615,000 barrels of oil a day being converted into mostly diesel and very low sulfur fuel oil.”

Consumers must be prepared to endure up to five years of turbulent oil markets, the head of ExxonMobil said Tuesday, citing under-investment and the coronavirus pandemic. Energy markets have been roiled by the Ukraine war as Russia has reduced some exports and faced sanctions while Europe has announced plans to wean itself off dependency on Russian fossil fuels in coming years.

Speaking ahead of ExxonMobil’s unveiling as the fourth international partner for Qatar’s natural gas expansion, chairman and chief executive Darren Woods said major uncertainty lies ahead. “You are probably looking at three to five years of continued fairly tight markets,” Woods told the Qatar Economic Forum. “How that manifests itself in price will obviously be a big function of demand, which is difficult to predict.”

On top of under-investment in finding new oil sources in 2014-2015, Woods said the pandemic “really sucked a lot of revenues out of the industry”. Woods said companies and governments needed to think long-term. “We are going to see a lot of volatility and discontinuity in the marketplace if we don’t get to more thoughtful policies,” he predicted. Representatives from the Middle East energy industry also renewed calls for better planning in consumer countries.

Qatar’s Energy Minister Saad Sherida Al-Kaabi meanwhile criticized the “demonization” of oil companies, and the windfall taxes on oil majors that many governments are proposing. “I don’t see the governments coming to pitch in when they (oil companies) were losing money and borrowing when the oil price was negative in Texas,” he said.

ExxonMobil has taken a 6.25 percent stake in the expansion of Qatar’s North Field, which contains the world’s biggest natural gas reserves. The stake is the same as France’s TotalEnergies while Italy’s Eni and US firm ConocoPhillips have 3.13 percent shares. Woods said the project will “bring balance to the global market”. – Agencies