Three factors pushed oil prices up more than 2 percent, and Aramco's CEO warned that the bull market in oil prices was far from over

In the European market on Tuesday (December 7), oil prices extended the previous day's rally, with Brent crude rising more than 2% as concerns about the Omicron variant affecting global fuel demand eased, and Iranian nuclear negotiations stalled, delaying the return
of Iranian crude.
Meanwhile, Saudi Aramco's chief executive warned this week that if investment in fossil fuels is reduced too quickly in the global transition to green energy, it will lead to runaway inflation and social unrest
.
The instability of the energy transition and the lack of clean energy supply may support oil prices
for longer than expected.

Three pressures eased, with oil prices rising more than 2%

Oil prices tumbled last week on fears that the vaccine's effectiveness against Omicron could wane, raising fears that governments could impose restrictions again to curb its spread, hitting global growth and oil demand
.
However, a South African health official reported over the weekend that Omicron cases there showed only mild symptoms
.
In addition, Anthony Fauci, the top infectious disease official in the United States, said: "So far [this variant] does not look too serious.
"

Jeffrey Halley, senior market analyst at OANDA, said: "Fauci's comments prompted more money back into long oil deals overnight as the market began to expect a global recovery and an increase
in oil consumption.
"

Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note: "Despite epidemiologists' warnings against premature conclusions about Omicron, the market is beginning to speculate that last week's sell-off seemed excessive
.
Early assessments of Omicron cases were declared mild, fueling a resurgence
of optimism.
”

The ING researchers said in a report: "Good news about the severity of Omicron should be taken with a grain of salt
.
Faster transmission may offset the benefits of milder symptoms, and the market has begun to grow tired of Omicron, but awareness of the variant is still in its early stages
.
”

In another sign of confidence in oil demand, Saudi Arabia, the world's largest oil exporter, raised its monthly crude price
on Sunday.
Previously, OPEC+ decided to maintain its continued increase in oil production by 400,000 b/d
in January despite the release of the US Strategic Petroleum Reserve.

In addition, Iran's delay in resuming oil supplies supported oil prices
.
Indirect nuclear talks between the United States and Iran have hit a roadblock
.
Germany on Monday urged Iran to come up with realistic proposals
in talks on its nuclear program.

Saudi Aramco CEO warns oil industry needs "orderly transformation"

Saudi Aramco Chief Executive Al Nasser said Monday that the oil industry must play a role in the energy transition to avoid "energy insecurity, rampant inflation and social unrest" and that the industry needs an "orderly transition.
"
If investment in fossil fuels declines too quickly during the global transition to green energy, it will lead to runaway inflation and social unrest
.

"There is a growing perception that the vast global energy system seems to be completely transformable overnight and that the entire world can run
on alternative energy sources," Nasser said.

"The commitment by many energy companies and countries to achieve net zero emissions by 2050 will require about $115 trillion in investment and 30 years to complete, and most worryingly, the right transition strategy is thought to be in place
," Nasser said.
However, the energy transition strategy remains full of
holes.
Some have tried to describe the current high energy prices as the first crisis
of the clean energy transition.
This is completely wrong
.
”

Fatih Birol, director general of the International Energy Agency, has said: "The current situation in the energy market has nothing to do with
the clean energy transition.
If there's a link, it's that clean energy supply is still inadequate
.
In May, the International Energy Agency recommended that energy groups must halt all new oil, gas and coal projects in order to achieve net-zero emissions
by 2050.

Against the backdrop of the global economic recovery, energy prices have risen
rapidly this year as supply struggles to keep up with demand.
Energy industry executives say this is partly due to slow investment
.
Data from commodities consultancy Wood Mackenzie shows that many oil exploration and production projects were delayed or cancelled
after oil prices plunged in 2014.
Frans Timmermans, the EU's senior climate change official, said the EU's record electricity prices highlighted the need to
accelerate the transition.

"If we had reached the green deal five years earlier, we would not have been in the awkward situation we are in now, because then we would have been less
dependent on fossil fuels and natural gas," Timmermans said.
He noted that the price of renewable energy has remained stable
even amid soaring fossil fuel prices.

In his speech at WPCC, Nasser said acknowledging the role of oil and gas in achieving net-zero emissions is difficult
for some.
But, he added, "it's much easier to acknowledge this reality than to deal with energy insecurity, rampant inflation and social unrest if prices are intolerably high
.
" Nasser expects countries' net-zero pledges to begin to unravel
.
”

U.
S.
crude futures have risen more than 40 percent this year, and tensions over European energy supplies have pushed prices sharply higher this winter
.
Some analysts believe that the instability of the energy transition and the lack of clean energy supply in the future market may support oil prices
for a longer period of time than expected.

(Brent crude oil futures daily chart)