ENERGY ASIA: Oil, gas executives urge resilience, diversification amid geopolitical uncertainty

Resilience and diversification are the critical needs in the oil and gas industry, especially during the times of geopolitical uncertainty, Muhammad Taufik and Dr. Daniel Yergin said at a press briefing during the Energy Asia 2025 conference held in Kuala Lumpur on June 17.

Taufik is the president and group CEO of Petronas, while Dr. Yergin is Vice Chairman of S&P Global.

Their remarks came in light of the recent spike in oil prices amid the escalating conflict between Israel and Iran. Both of them underscored the importance of being prepared for potential shocks to the energy system and the need for continuous investment in a resilient energy infrastructure.

Taufik highlighted the surge in oil prices, which jumped from $65 to $75 following the recent missile strikes.

At 11:37 am London time, the ICE August Brent futures contract was up $1.34/b from the previous close to $74.57/b, while the NYMEX July light sweet crude contract was up $1.18/b to $72.95/b.

"We are not calm. If anything, it's like a duck swimming in water—furiously paddling beneath the surface," Taufik stated, reflecting the anxiety among industry leaders as they navigate their operational exposures in the region.

"Never underestimate the importance of availability of supply during times of crisis; this is what is going to cause shocks to the system," Taufik warned, echoing sentiments shared by Amir Nasser, CEO of Saudi Aramco.

Despite the rising prices, both Taufik and Dr. Yergin reassured that there have been no significant disruptions in supply.

"Supplies continue to flow and remain abundant," Dr. Yergin remarked, attributing the price increase to a risk premium rather than actual scarcity. However, he cautioned that this situation could change rapidly given the region's volatile nature.

The executives emphasized the importance of continuous investment in the energy sector to ensure resilience against future disruptions.

"This is probably a test for the industry," Taufik noted, highlighting the cyclical nature of the oil market where complacency can lead to crises. "We tend to perpetuate cyclicality by saying it's okay because it's abundant, and then we find ourselves in a situation where we have to recover when demand surges."

In addition to addressing immediate concerns, Dr. Yergin underscored the necessity of diversification in energy sources, echoing the historical perspective of Winston Churchill, who once remarked that "safety and certainty in oil lies in variety and variety alone."

"One of the fundamental ways that you get resilience in an energy system is by having it diversified," Dr. Yergin said, reinforcing the relevance of this message from 1912 to the current landscape in 2025.

As the oil and gas industry grapples with these unprecedented challenges, the executives called for vigilance and proactive measures. The current situation may represent a "calm before the storm," and the emphasis on collaboration, innovation, and strategic investment is seen as crucial for navigating the complexities of the evolving energy landscape.