A candid debate on global energy security, investment, and technological disruption unfolded at ADIPEC 2025 as four of the world’s most influential energy executives joined US Deputy Secretary of Energy James Danly for a high-level panel moderated by Hadley Gamble of IMI.
In a session that cut through market speculation to focus on long-term fundamentals, panellists from ADNOC, Eni, Petronas, and the US Department of Energy agreed that the industry faces a looming supply crunch, not an oil glut, driven by chronic underinvestment, volatile policy frameworks, and competing energy transition narratives.
When asked whether an oversupply could emerge by 2026, not a single hand went up in the audience. The consensus onstage was equally clear: despite cyclical markets, today’s muted upstream investment levels could set the stage for higher prices and future supply shortages.
An oil glut?
Eni CEO Claudio Descalzi was emphatic that fears of an oil glut are misplaced. “We are investing half of what we need to invest to increase production,” he said. “Our investment has been to fight depletion, and now we know that the money is increasing because we have around 103 million barrels per day, but the supply is more or less there. Now the demand is increasing in 2026 by an additional one million barrels per day on average, and we are not investing enough.”
Descalzi warned that the industry’s capital expenditure levels remain dangerously low compared to historical averages. “If we continue to say that we have excess supply, that means we reduce prices, reduce investment, and at a certain moment, we have a peak of price because there is not enough supply,” he added. “We have to be wise and attentive to what is happening.”
Petronas president and group CEO Tengku Muhammad Taufik echoed that sentiment, cautioning against policy-driven volatility and short-term market reactions. “There’s a degree of sanity we need to hold when volatility strikes us every day,” he said. “There has not been enough being ploughed back into the core of fossil fuels and hydrocarbons, which form the backbone of our energy systems today.”
Taufik reminded the audience that while trillions have flowed into renewables, the world cannot afford to neglect the stability that hydrocarbons still provide. “Ignore the noise and stick to reading the core signal,” he said, referencing the remarks of ADNOC’s leadership earlier in the day. “We must take talk of a glut with a pinch of salt.”
ADNOC’s Al Kaabi: “Underinvestment is the real risk”
Musabbeh Al Kaabi, CEO of ADNOC Upstream, underscored the structural imbalance between supply and demand. “There is an acceptable level of economic growth globally,” he said. “As long as we maintain that, the demand for oil continues to grow.”
He argued that while forecasts differ on the exact figures, “the industry is inherently underinvested.” The risk, he noted, is twofold: meeting future demand while mitigating natural decline. “The challenge for this industry is the lack of investment to mitigate potential decline but also to meet growing demand,” he said.
Al Kaabi warned against complacency and stressed that responsible producers like ADNOC bear a crucial responsibility to maintain long-term investment discipline.
From Washington, James Danly, the US Deputy Secretary of Energy, offered a policy perspective grounded in market economics. “Markets are cyclical, with waxing and waning supply and demand,” he said. “The most important thing is that the policy framework allows businesses to respond to market signals correctly.”
Danly highlighted deregulation as a key priority. “The objective is to decrease regulatory obstacles so that market forces are allowed to express themselves correctly,” he said. “Secure energy is affordable energy. Affordability and cheapness are not the same thing; the objective is rational commercial decisions that encourage productivity and prosperity.”
He also pointed to recent US actions to remove barriers to investment. “The Department of Energy just petitioned FERC to relieve regulatory obstacles for colocation of generation load,” he said. “That will open up a lot more development very quickly.”
Turning to Europe, Eni’s Descalzi delivered one of the panel’s most sobering assessments. “The main issue in Europe is that we don’t have energy,” he said. “We didn’t have a real energy security plan before the invasion of Ukraine. Suddenly, we started talking about energy — but first, you need competencies, trust, and a base load.”
Descalzi contrasted Europe’s regulatory environment with that of the US. and UK. “In Europe, you have hundreds of books of regulation; in the UK or U.S., you can read a few pages and understand them,” he quipped.
He called for a more pragmatic approach that includes long-term gas contracts, investment in LNG infrastructure, and acknowledgment of nuclear’s role in maintaining baseload stability. “If you want to build hyperscale data centers, you need flexible baseload — gas or nuclear,” he said. “Europe pays three to four times more for energy than industries in the U.S., which is an issue of competitiveness.”
Artificial intelligence
When the discussion shifted toward the intersection of AI, capital flows, and energy policy, Taufik offered one of the session’s most memorable lines. “There’s artificial intelligence we should pursue, natural stupidity we should avoid, and common sense, which we should have much more of,” he said to laughter and applause.
He urged policymakers to “create policies that enable, not obstruct,” pointing to Southeast Asia as an emerging model of pragmatic collaboration. “Malaysia, Vietnam, and Singapore are working together to decarbonise through cross-border energy cooperation — displacing coal while ensuring affordability,” he said. “It’s turning into an energy addition, not just an energy transition.”
Al Kaabi expanded on the role of artificial intelligence in reshaping industrial operations. “AI poses challenges, but equally, many opportunities,” he said. “We’re deploying AI across all our operations — generating first-of-a-kind agentic solutions to disrupt the conventional way of running the business.”
He noted that ADNOC is integrating subsurface models and development plans that once took years to process. “Now, we can integrate data in real time and optimize every single activity we do,” he said. “It’s improving decision-making, efficiency, and optimization across the board.”
However, he cautioned that AI adoption will increase energy demand, further reinforcing the need for multiple energy sources. “AI adds significant value but comes with challenges that will require energy from multiple forms,” Al Kaabi said. “That’s why we see the future as energy addition, not energy transition.”
Sanctions, Russia, and the politics of energy
The conversation concluded on geopolitics, with Danly addressing sanctions on Russia’s energy exports. “There are going to be market effects from any action taken to change the disposition of commodities,” he said. “The objective is to reduce one of the main sources of revenue for an actor employing its energy sales for malign activity.”
He acknowledged uncertainty about the impact of sanctions. “It’s difficult to predict exactly what the effects are going to be,” he said. “You act, you wait, you see, you respond — and that’s how these things play out.”
On the Strategic Petroleum Reserve (SPR), Danly confirmed that replenishment is underway. “The SPR has been depleted, and it’s part of our job going forward to try to replace it,” he said, calling it “one of the important tools we have strategically in the United States.”
The ADIPEC 2025 discussion underscored a shared recognition that the global energy system is at an inflection point. Whether driven by regulatory overreach, underinvestment, or technological acceleration, the risks of misalignment are growing.
As Hadley Gamble summed up near the close: energy leaders are less divided on ideology than on execution. The question is not whether to transition — but how to sustain growth, security, and affordability in parallel.
