Tell us a little bit about your forecast for the demand environment because you have been a little bit more bullish than some of the Wall Street forecasters and the IEA.
We strongly believe that the demand fundamental is healthy and strong. We are seeing a demand growth of about 1.1 to 1.3 million barrels per day this year, almost the same next year in 2026. It's a record year for oil, gas, and even coal. When you look at the five-year average, it's at the lowest end of the five-year average in terms of physical barrels storage available in the market. So, it tells you that demand is real and it is strong. It is not reflected in terms of over supply or glut otherwise you will see this storage facility increasing significantly. We don't have an oversupply glut because supply is growing from the US. Supply demand fundamental is healthy. We are seeing more demand especially from developing countries. We're seeing demand growth from Asia in general and even from the US the demand is strong and that's reflected on the call on us for supply.
There's a concern about China demand that they're shifting to EVs quite rapidly and that'll decrease their oil consumption. They've been the biggest consumer for years now.
True. There is an increase in the number of electric vehicles in China but you have to look at also the other sectors because even with that growth in electric vehicles and still internal combustion fleet is huge in China the other sectors that are also increasing offsetting that small decrease because of electric vehicles is aviation is growing by almost 8 to 9% in China requiring more jet fuels and liquid to chemical we are seeing growth of 500 to 700,000 to supply carbon fiber for electric vehicles for solar panels for turbines making them. So they need more liquid to chemicals. So oil is shifting to chemicals and using it as carbon fiber on all of these sectors.
So you don't see a slowdown?
No, we don't see. We have been saying this for some time that oil gas will continue to grow for decades to come and this is reflected on record years on year.
What about on the supply side? What will be the impact of the US now imposing sanctions on Russian oil companies?
We will wait and see. It gave 30 days for certain companies or certain markets to shift. The sanctions is Lukoil and Rosneft. We need to understand also Russia supply close to 7 million barrels export to the market almost four and a half to 5 million barrels of crude and two to two and a half million barrels of products depending on their refining health.
If there is a need and even if the US goes further here when it comes to Russian oil, would Saudis step in to fill the gap for instance to places like India?
Well, you know, with regard to how much we produce every month it targets we receive it from the Ministry of Energy depending on their agreement and quota based on the OPEC+ agreement. So that's always will be reviewed by the ministry and the decisions based on they always try to stabilize the market and make sure that there is capacity but this decisions belongs to the Ministry of Energy.
How do tariffs impact the energy market?
Well, you know, oil is not included as part but tariffs impact economy, certain economies and you know healthier economy means more demand but we don't see huge impact as of yet because the demand this year is healthy and we expect the demand next year is healthier.
What about your own company's investment? I think you're targeting north of $50 billion dollars in capex this year. Are you on track and where's that investment going?
Well, you know the target this year the guidance is 52 to 58 billion. Today if you think about Aramco today there is a hundred billion dollar of construction that is going on today. So but we execute in the neighborhood of 50 plus billion dollars in each year in terms of capital. Most of the capital goes to maintaining our capacity, MSC of 12 million barrels but a lot of the capital is going to gas. We are growing our gas compared by more than 60% by 2030. So gas growth is significant and most of the capital is going into gas growth and also our latest partnership with Humane. So we are big investor in all these sectors in addition to minerals.
Is that going to include rare earth minerals?
Well, we are, everyone's interested in. We are looking at lithium right now and we're looking at the first processing plants by 2027.
Okay. So this could come in the coming years?
Oh yeah, it is already under. We are drilling because this comes from aquifers and we treat this aquifer water and then we extract lithium.
You've sort of called out others for cutting exploration programs early.
It is important to continue to explore. We've seen what happened in investment. Now oil investment is down compared to higher years by almost 20%. Final investment decision for projects for oil is down by almost 35%. There is a concern considering that the decline is close to six million barrels per day. This is just if you maintain your current production of over 100 million barrels today. The decline just to maintain that production as is without the growth is six million. Add to it the growth. You need substantial capital investment to meet demand requirements.
So what happened? Everyone just it was premature to worry about the decline of oil.
Well, I think the forecast had something to do with it up to last year. You know, forecast said that renewable is growing and you know there was some calls for companies to stop investment. If you look at requirement now for data centers by 2030 the requirement for power for data center is almost four times all electric vehicles. So this is substantial. We need more energy because in spite even though there was almost 11 trillion dollars put in renewables still renewable created a 15 million barrel of oil equivalent. It's not enough.
That is totally not enough. And renewables and natural gas. What's going to power the data centers?
Most likely I would say more into gas and then renewables and alternative but more into gas. So you need more gas to power all of these data center. You need energy whatever the source to power all of these data centers. And we are seeing a huge growth in energy. If you look at the last 10 years, we are almost 340 million barrel of oil equivalent. This is the energy that we've grown from 295 to 340. 45 million barrel of oil equivalent growth in 10 years. That's significant growth. So we need alternatives. We need gas. We need hydrocarbons in addition to all alternatives.
So how do you do that? How do you maintain your current lead on oil production and exploration and at the same time invest for the future of renewables?
Well, we are focused always on the long term and if you focus in the long term, you will make the right investment by reading the market.
You said there's going to be demand for decades for what?
And that's why we are investing and making sure today we have a healthy spare capacity. We are one of the few companies in the world that has that healthy spare capacity. If you look at our gas growth, it's significant. We are also significantly investing in renewables. We are looking at hydrogens in terms of investment also depending on the market and if there is an offtake. We are investing also as I said in rare earth metals minerals and this is important for us. We are putting our investment because demand is there and mostly coming by the way from developing countries or emerging economies. 80% of the growth is in emerging economies. The consumption is low right now. If you look at Asia and it's one to two barrels per capita. If you look at Europe, it's nine barrels per capita. And if you look at the US, it's 22 barrels per capita. So there is a huge potential for growth in emerging economies.
