Energy investment insufficient to meet global demand, Guyana's president says

By Nathan Crooks and Marianna Parraga

HOUSTON, May 4 (Reuters) - The gap between supply and demand is widening as global energy systems face strain, Guyana's President Irfaan Ali said on Monday, with the Iran war in its third month and continuing to drive up oil and gas prices amid supply shortages.

"What is happening on the Strait of Hormuz is teaching us an important lesson," Ali said in a keynote address at the Offshore Technology Conference in Houston, adding that fossil fuels would continue to play an essential role in the global energy mix, even as renewables capacity is built out.

Markets have been reeling since the start of the war, which has caused damage to infrastructure across the Middle East and led to the effective closure of the waterway, a key trade chokepoint that typically handles nearly a fifth of global energy supplies. Oil prices have climbed above $100 a barrel and global trade flows have shifted as some nations scramble to secure supplies of basic commodities including crude and liquefied natural gas.

Ali said the widening gap between supply and demand is not a short-term fluctuation, but a structural problem. Amid increasing electrification, he said that critical minerals - and their skewed geographic distribution - also would become increasingly important to energy security.

"These developments point to a fundamental shift in the geopolitics of energy. The world is at risk of moving from one form of dependence to another. We are not eliminating dependence. We are relocating from fuels beneath the ground to minerals within it," he said, adding that "energy balance" had become a more useful term than "energy transition."

Guyana has emerged as a big player in the global energy market, following the fast development of its offshore oilfields since 2019. Exxon Mobil XOM.N, which leads the consortium that controls all crude and gas production in the South American country, has boosted output capacity to more than 900,000 barrels per day since it began producing crude there six years ago.

"We must view the reality of our world in this transition," Ali said. "The global energy challenge is not only about transition. It is about volume and sufficiency," he added.