Saudi Aramco’s chairman calls for “energy realism”

Yasir Al-Rumayyan, chairman of Saudi state-owned oil company Saudi Aramco and governor of Saudi Arabia’s $1 trillion Public Investment Fund, has urged policymakers to adopt what he called “energy realism” in response to the Iran war’s impact on global markets.  

Speaking at the opening session of the Future Investment Initiative (FII) Priority Europe summit, hosted in Rome last week, Al-Rumayyan was asked for his key takeaway from the recent conflict for global energy security. “Energy realism, that’s what we need to really focus on,” he said. 

The man charged with increasing Saudi’s non-oil exports and non-oil GDP as part of Vision 2030, openly criticized European regulation and its drive to replace fossil fuels with renewable energy.

“Unfortunately, in the last decade we saw a lot of push from new energy,” said Al-Rumayyan, adding “which is … a great addition, but it’s not going to be a substitute for fossil fuels. The world cannot not rely on fossil fuel.”

Last December, the Gulf Cooperation Council expressed “deep concern” at the EU’s proposed sustainability and due diligence legislation.

Al-Rumayyan alluded to this when he mentioned how such legislation could have negatively impacted “investors such as ourselves, Aramco, Sabic, PIF, not only to invest more but also to keep our investments in Europe.” 

In February, EU member states in the European Council voted to approve an agreement to significantly scale back sustainability reporting and due diligence requirements for companies which should help attract further investment in the continent’s energy sector. 

The PIF invested €98 billion ($112.12 billion) across Europe and the UK between 2017 and 2025, while Aramco deployed around €80 billion ($91.53 billion) with European suppliers, including approximately €20 billion ($22.88 billion) in Italy alone.

The fund has identified around 140 potential partnership opportunities with European companies under its new 2030 strategy, including collaborations aimed at supporting Saudi Arabia’s automotive industry and investments in Italian luxury and manufacturing companies. 

“The opportunities that we’re talking about that need joint ventures, the strength of European industries, is worth a total of about €10.4 billion ($11.9 billion),” he said. “And this is only until the end of 2030.”

Highlighting the fact many industries remain dependent on oil and gas, including petrochemicals, fertilizers, and food production, Al-Rumayyan added that growing demand from AI technologies will further increase global energy needs.

He also highlighted the critical role that Riyadh had played in propping up the energy market and global economy during the blockade on the Strait of Hormuz. 

During the Iran conflict, the kingdom has been able to export up to seven million barrels of oil a day through its East-West pipeline to the Red Sea port of Yanbu. 

Even so, Aramco is now looking at expanding its international oil storage facilities—it currently has a high number concentrated in Asia, Korea and Japan. 

Al-Rumayyan added that while the PIF’s new investment strategy is focused on driving domestic growth, the fund remains committed to investing overseas.

He explained that foreign investments might become smaller as a percentage share of the total but larger in absolute terms as the fund continues to expand its assets under management.

This story was originally featured on Fortune.com