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By Clyde Russell, Asia Commodities and Energy Columnist

Hello Power Up readers! Much of the debate in crude oil markets right now is whether global benchmark Brent futures will climb above $100 a barrel. The supply tightening led by Saudi Arabia and Russia, the leading producers in the OPEC+ group, is competing with concerns over the true state of demand in China and the fear that the current price above $90 will lead to renewed inflation, more monetary tightening and weaker economies. But there is also a longer-term concern for the oil industry, and that’s how climate policies are discouraging investment.

Today’s top headlines:

• Oil prices ease 1% after U.S. Fed warns of higher rates for longer

• EXCLUSIVE: Russian oil producers send CPC Blend to UAE, open new export route

• Exxon sees $16 billion in earnings for fuels, chemicals by 2027

Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford/File Photo. 

Oil companies are becoming increasingly cautious about investing heavily in new production as governments across the globe implement policies to fight climate change. Even as oil prices have climbed close to $100 a barrel, oil companies are choosing to boost dividends and buy back shares, rather than increase production, as Rod Nickel and Nia Williams report here.

While environmental groups say slowing oil production growth can accelerate the move to renewable energy and cut carbon emissions, oil executives are warning that the lack of investment could exacerbate energy shortages in poor countries and fuel inflation.

Oil and gas investment peaked in 2014 at $887 billion. It is expected to reach $579 billion in 2023, up modestly from the average of $521 billion between 2015 and 2022, a period that included both the 2014-15 price crash and the COVID-19 pandemic, according to figures from consultancy Rystad Energy.

The logo of Spanish energy group Repsol is seen at a gas station in Arinaga, in the island of Gran Canaria, Spain, October 26, 2022. REUTERS/Borja Suarez.

Spain’s Repsol SA is asking an international tribunal to force U.S. natural gas exporter Venture Global LNG to fulfil its contract to supply liquefied natural gas (LNG), or provide compensation, Curtis Williams and Marwa Rashad report here in a Reuters exclusive.

Repsol becomes the fourth European customer to pursue arbitration against Venture Global for failing to supply cargoes from its plant that has been operating for 18 months. The U.S. company says the facility isn’t fully operational due to faulty power equipment.

Pylons of high-tension electricity power lines are seen in Avesnes-le-Sec, near Cambrai, France, January 8, 2021. REUTERS/Pascal Rossignol/File Photo.

Europe’s electricity sector is warning that massive investments are needed to upgrade the continent’s ageing power grids, and if they aren’t the energy transition will be put at risk, as Reuters reports here.

Europe aims to electrify its vehicle fleet and massively expand renewable energy, but the industry association Eurelectric says investments in grids from now to 2050 need to be at least 84% higher than they were in 2021.

Investors withdrew record funds from the world’s largest clean energy investment vehicles so far this year despite calls for climate action being amplified by heat waves, floods and wildlife, Reuters columnist Gavin Maguire reports here.

Investors in the first eight months of the year pulled a net $765 million out of the world’s largest clean energy exchange traded fund, the iShares Global Clean Energy ETF, as other sectors appeared attractive on a relative basis. 

“If we continue down this path, we risk losing the British people and the resulting backlash would not just be against specific policies, but against the wider mission itself.”

British Prime Minister Rishi Sunak explains his thinking in watering down the U.K.’s plans to tackle climate change by delaying a ban on the sale of new petrol cars.

Australia’s Fair Work Commission has made recommendations for Chevron and two unions to end their labour dispute at the giant Gorgon and Wheatstone LNG plants in Western Australia state, as Reuters reports here.

The proposals come a day after the U.S. energy major and the unions failed again in attempts to resolve the deadlock, which has threatened to disrupt output at the two plants, which supply about 7% of the world’s LNG.

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