Shell CEO warned that given that OPEC's spare capacity is smaller than the market expected, oil prices will face upward pressure in the future, and price capping measures for Russia will not work if only the United States and Europe participate.

Shell CEO Ben van Beurden said on Wednesday that the challenge for the world is to find ways to accelerate the energy transformation, with the biggest problem being underinvestment in renewable energy sources such as hydrogen and biofuels, which is expected to have an energy investment shortfall of $3,000bn over the past three years. As OPEC spare capacity is very low and global demand has returned to pre-epidemic levels, the crude oil market will face a period of volatility for some time to come:

Unless demand decreases rapidly in the short term, we will face a tight supply market.

With regard to the G7 Group's attempt to impose a cap on Russian oil prices, Beurden said it was too early to draw conclusions about the Russian oil price cap.But if only the United States and Europe participate, the price cap will not work:

The mechanism can work only with the broad participation of countries other than Europe and the United States.

On the issue of European natural gas supply, Beurden believes that considering that Russian gas accounts for about 1/3 of Europe's natural gas supply.Europe cannot replace pipeline gas supplies from Russia with liquefied natural gas in a short period of time:

There will be more LNG supplies into Europe, but will there be plenty of additional new LNG supplies to fill the gap? I don't think so.

Beurden said that, as a last resort, Europe could extract up to 50 billion cubic metres of additional gas a year from the disputed Groningen gas field in the Netherlands, but this could only be used as a last resort (the production of the field, which triggered an earthquake, has been limited for a long time).

At the recent summit of the Group of Seven leaders, G7 leaders announced new sanctions against Russia, agreeing to set price caps on Russian oil and gas imports. Possible measures include a ban on shipping services to tankers carrying Russian oil unless the price of the oil is lower than a particular price. Supporters say the proposal will achieve two goals: reducing Russian oil sales and lowering international oil prices.

But opponents argue that capping will be difficult to implement and enforce. The flow of Russian oil has been largely diverted to countries such as India that do not impose sanctions on Russia.The success of future sanctions plans will depend on the cooperation of these countries.

In terms of spare capacity for OPEC, French President Macron has publicly stated that the United Arab Emirates and Saudi Arabia can hardly increase oil production: the production capacity of the United Arab Emirates has reached its limit, and Saudi production can only be increased by 150000 barrels per day, while OPEC has little capacity to increase production within six months.

As the only two countries in the OPEC that still have spare oil capacity, Saudi Arabia currently produces 10.5 million barrels per day, with a maximum capacity of 1200-12.5 million barrels per day, while the United Arab Emirates produces about 3 million barrels per day, with a maximum capacity of 3.4 million barrels, but neither country can significantly increase its capacity in the short term. At present, France has publicly called for "diversified supply" of energy, including allowing Iran and Venezuela, which have been sanctioned, to return to the international oil market.