Saudi Aramco, IEA Chiefs Clash In Houston Over The Future Of Oil

• At CERAWeek 2025, Saudi Aramco’s CEO Amin Nasser challenged the IEA’s forecast of peak oil demand.'

• The IEA maintained that even with peak demand, ongoing investments in oil and gas will be necessary due to natural field declines.

• Aramco’s ambitious plans to scale blue hydrogen and ammonia face high costs and weak market demand, particularly in Europe and Asia.

With the CERAWeek 2025 conference in Houston drawing to a close, C-Suite executives, ministers, and top officials have weighed in on the trajectory of the global oil and gas sector, debating whether tariffs, trade, and competition will replace security, affordability, and sustainability in shaping energy markets and policy. However, one of the biggest highlights of the conference has been the showdown between Saudi Aramco CEO Amin Nasser and IEA Executive Director Fatih Birol, who held highly divergent views on the future of the global oil industry.

Once again, Nasser was adamant that there were “inherent flaws” in the energy transition away from conventional fuels, saying, "So I pay little attention to forecasts claiming that next year will be peak this, or peak that," in a thinly veiled dig at the IEA, which has predicted a peak in oil demand by the end of the current decade.

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In its defense, the IEA says an oil demand peak doesn't necessarily mean a rapid plunge in fossil fuel consumption is imminent, adding that it will probably be followed by "an undulating plateau lasting for many years." Fatih Birol reiterated that position in his remarks to the Houston conference, where he stated that investments in existing oil and gas fields are still needed to counter steep natural declines. While some analysts interpreted this as an about-face designed to align with Trump and his "drill baby drill" agenda, in reality, the IEA has never advocated for an end to investments in upstream oil and gas.

“Even as demand for fossil fuels falls, energy security challenges will remain since the process of adjustment to changing demand patterns will not necessarily be easy or smooth. For example, the peaks in demand we see based on today’s policies do not remove the need for investment in oil and gas supply, given how steep the natural declines from existing fields often are,” the IEA stated in its 2023 World Energy Outlook.

Republican lawmakers have threatened to reassess funding for the IEA, accusing it of becoming an "energy transition cheerleader."

Cutting Emissions, Not Oil

With the global energy transition picking up steam, hundreds of companies have laid out plans to cut their greenhouse gas emissions, with the more ambitious ones pledging to achieve net zero emissions. Given this backdrop, Big Oil companies are finding themselves in a dilemma—under pressure to join the fight against climate change while demand for their energy commodities remains high. Many are developing innovative ways to reduce emissions while maintaining their core oil and gas businesses.

Saudi Aramco is among them. The world’s biggest oil and gas company has unveiled plans to reach net-zero by 2050 without sacrificing oil and gas production.

During a rare two-day visit by Fortune last May, Aramco showcased dozens of research projects at its headquarters in Dhahran, which the company believes will help it tackle climate change while continuing to pump around 9 million barrels of oil per day. Aramco claims its tech breakthroughs could cut carbon emissions per barrel of oil by 15% by 2035, equivalent to 51.1 million tons of carbon annually.

“We don’t see any contradiction. Combating emissions from these conventional energy sources is a very viable option,” says Ashraf Al-Ghazzawi, executive vice president for strategy and corporate development.

“We need all sources of energy to meet the growth in demand, which is just tremendous in the developing world. The main pillar of our strategy and technology is efficiency and optimization of our existing production,” Ahmad Al-Khowaiter, Aramco’s executive vice president for technology and innovation, told Fortune. According to Al-Khowaiter, the company has tripled its research-and-development staff since 2010 and registered 1,033 patents with the U.S. Patent Office. Aramco now spends about $800 million annually on R&D, 60% of which is focused on sustainability.

Carbon capture is one of the key technologies Aramco has adopted to cut emissions. At its Hawiyah gas plant, the company captures carbon emitted during oil and gas production, transports it 50 miles away, and injects it into an oil well to boost crude recovery, as well as to store the carbon. Al-Khowaiter revealed that Aramco aims to cut the cost of carbon capture by 50%, making it commercially viable.

In December, Saudi Aramco signed a shareholders’ agreement with Linde Plc (NYSE:LIN) and Schlumberger Limited (NYSE:SLB) for the development of a 9mn t/y CCS hub at Jubail. Under the agreement, Aramco will hold 60% ownership, with Linde and SLB each taking 20%. The 9mn t/y first-phase facility is due online by the end of 2027.

Aramco also aims to produce 11 million tonnes of blue ammonia from its Jafurah natural gas field by 2030. For over a decade, the company has explored technologies to produce lower-carbon hydrogen from hydrocarbons, including Thermo-Neutral Reforming (TNR), with a goal of producing blue hydrogen from about 2 million tonnes of blue hydrogen—by capturing CO2 emissions from production. However, Aramco is facing market challenges in selling blue ammonia, with CEO Amin Nasser revealing that blue hydrogen costs the equivalent of about $250 per barrel of oil—three times higher than the current Brent spot price.

“It is very difficult to identify any off-take agreement in Europe forbluehydrogenfor blue hydrogen... and they explained it's because of the high cost. Even the customers in Japan and Korea whichareplanningmassiveH2economieswhich are planning massive H2 economies are waiting for government incentives. Until they get these incentives, it’ll be costly for them to pursue that blue hydrogen,” Nasser told analysts.

Figuring out which among the multiple lines of R&D will prove successful could take years for Aramco, with time not on its side. However, the company remains firm in its strategy. “We were never an either-or company. Aramco provides a great example where emissions can be dealt with, it can be managed,” said Ghazzawi, Aramco’s strategy chief.