Saudi Aramco CEO: EU Energy Bill Freeze Not Viable 'Long-Term Solution'

Consumers in some European countries face skyrocketing energy bills due to a surge in gas prices on the European market. EU countries blame Russia, even though the prices started to soar last year. Moscow has pointed out that EU opposition to Nord Stream 2 and sanctions plays a huge role in the current situation.

CEO of global energy giant Saudi Aramco, Amin Nasser, has criticized EU measures proposed to tackle the ongoing energy crisis. He argued that imposing greater taxes upon energy companies, when the countries equally request output increases, is a poor idea and won't help solve the problem.

He found another measure – to redistribute profits from the new windfall tax among needy citizens – also "not helpful" in terms of tackling the energy crisis.

"Freezing or capping energy bills might help consumers in the short term, but it does not address the real causes and is not the long-term solution," the CEO said.

Nasser argued that underinvestment in hydrocarbon extraction was the root cause of the current crisis, which was the result of fossil fuel supply shortages compared to surging global demand. He characterized the investments in extraction as "too little, too late, too short-term" at a time when alternative, green energy sources are still in short supply.

The Saudi Aramco CEO suggested that demand will persist despite global economic turbulence, eating up the few added supply lines that have emerged in the market.

"When the global economy recovers, we can expect demand to rebound further, eliminating the little spare oil production capacity out there. That is why I am seriously concerned," Nasser warned.

At the same time, the head of the energy giant dismissed claims that the conflict in Ukraine exacerbated or outright caused the energy crisis. Nasser stressed that even were the conflict to end today, the crisis would persist, given that its root causes lie deeper.

EU countries, which are suffering the biggest blow of the energy crisis caused by skyrocketing gas prices ahead of winter, blame the Russian special military operation in Ukraine. The Kremlin, in turn, has pointed to the trouble that western anti-Russian sanctions cause, namely preventing the timely maintenance of Nord Stream 1 turbines abroad. The failure to maintain the turbines caused Russian gas giant Gazprom to pause the pipeline in September, severely reducing gas exports to the continent.

Additionally, many European countries turned down the Kremlin's demand to pay for gas by converting euros into rubles in a Russian bank. Moscow said the move to switch to ruble payments was prompted by the European sanctions.