In unusually frank remarks, Ali Naimi, the kingdomâ€™s oil minister, said: â€œLimited capacity along the entire supply chain is the real source of current global supply tightness and represents the greatest threat to ensuring adequate energy to fuel future economic growth.â€
In other words, no matter how much oil we take out of the ground, if it cannot be processed then it won’t help meet rising demand. Prices are being driven by the bottleneck in production.
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Together with the IEA, Mr Naimi and other Opec ministers have long argued that the need is for more investment in refineries, most of which are located within oil consuming countries. He said to overcome the current bottleneck â€œwe must create an environment that encourages investment in energy infrastructure along the entire value chainâ€™â€™.