Hydrocarbons regaining priority amid global instability – Oando

Global energy security concerns and mounting economic pressures are leading governments and investors to prioritize reliable hydrocarbon supply over the pace of an immediate energy transition, according to Oando Plc's Group Chief Executive, Wale Tinubu.

Tinubu stated in a BBC interview that rising inflation, geopolitical instability, and energy supply disruptions are forcing countries to reassess how quickly they can transition away from hydrocarbons while maintaining economic stability and energy access. He noted that successive global crises, including the COVID-19 pandemic and conflicts in Ukraine and the Middle East, have placed governments under increasing economic pressure, weakening their ability to aggressively subsidize renewable energy transitions.

“

The inflationary impact we’re going to experience is not going to allow governments to have the funding to subsidize the drive into renewables. I expect that hydrocarbon demand is increasing. The evidence is there that capital is moving back into hydrocarbons, and people realise that energy security is a lot more important now than energy transition.

"The inflationary impact we’re going to experience is not going to allow governments to have the funding to subsidize the drive into renewables," Tinubu said. "I expect that hydrocarbon demand is increasing. The evidence is there that capital is moving back into hydrocarbons, and people realise that energy security is a lot more important now than energy transition."

“

There’s already demand coming out of Asia and across Africa. Developing countries have a huge gap to meet over the next couple of years, and so there’s major demand for products, particularly gas. It’s just a question of filling that demand.

This shift in priorities occurs as developing economies, particularly across Africa and Asia, face significant energy deficits and rising industrialization needs. Tinubu argued that demand fundamentals for hydrocarbons, especially gas, remain strong because these regions require affordable and reliable energy to support economic growth and improve living standards. "There’s already demand coming out of Asia and across Africa," he said. "Developing countries have a huge gap to meet over the next couple of years, and so there’s major demand for products, particularly gas."

Furthermore, Tinubu highlighted changing perceptions around geopolitical energy security. Recent tensions in the Strait of Hormuz have challenged the assumption that traditional hydrocarbon-producing regions offer greater supply stability, creating an opportunity for African producers to strengthen their relevance in global markets. He believes Africa's strategic trade routes, substantial undeveloped reserves, and improving investment climate position the continent favorably as countries seek more diversified and secure energy supply options.

“

The premium that the Arab Gulf got for safety has been demystified.