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Surging global oil prices offer ‘significant promise’ for Asia’s green energy growth – but challenges remain
- Asia has faced the brunt of fluctuating oil supplies, with China and India having tried to cushion the impact by buying discounted Russian oil
- With few alternatives, Asian nations may have to bolster renewable energy development, observers said
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Saudi Arabia’s decision to cut oil production by 1 million barrels a day from next month is expected to hit the fuel’s largest consumer Asia, but that move could also be the catalyst for renewable energy development in the region, analysts said.
The voluntary cut pledged by Saudi Arabia comes as part of a broader deal by the Organization of the Petroleum Exporting Countries (Opec) and their allies including Russia to extend production cuts into 2024 to boost sagging oil prices.
Benchmark Brent crude oil prices rose 0.6 per cent to US$76.80 per barrel during Asian trading hours on Monday.
“Saudi Arabia’s decision is bound to increase prices, moving them back closer to the US$80-a-barrel threshold. And indeed, that would impact oil importers in Asia, aggravated by a strengthening US dollar,” said Viktor Katona, lead crude analyst at commodities data and analytics company Kpler.
Energy-hungry Asia has faced the brunt of fluctuating oil supplies following Russia’s invasion of Ukraine. Two of the top consumers, China and India have tried to cushion the impact by scooping up discounted Russian oil supplies.
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