ROME: The long-term planning behind Saudi Arabia’s east-to-west oil pipeline provided a lifeline for global energy markets during the Strait of Hormuz closure caused by the war in Iran, Public Investment Fund Governor Yasir Al-Rumayyan told the FII Priority Europe summit on Thursday.
Speaking at the Rome summit, Al-Rumayyan commented on the role Riyadh played in rescuing the energy market and global economy, reflecting on the strategic value of the pipeline built across the Saudi Arabian peninsula.
“We had a similar situation back in the 80s where the strait (of Hormuz) performance was threatened with a blockade by the Iran regime, and it was decided since then that we would have a pipeline from east to west (of the Kingdom),” he said.
Al-Rumayyan stressed that while the pipeline provided a “lifeline” for the Saudi economy, “if it wasn’t for this kind of long-term thinking, the world would have been in a really bad situation, even worse than where we were,” due to limited oil reserves worldwide, including in China and the US.
He argued that in a world hungry for energy, new energies — renewables and nuclear, among others — are an addition, not a substitute, for fossil fuels.
“We witnessed this very well during these past few months. The world cannot not rely on fossil fuel,” Al-Rumayyan said.
Beyond oil and gas, he emphasized that the petrochemical industry serves as a base for numerous sectors, including plastics, polymers, fertilizers, pesticides, personal care, and cleaning products — all critical to food production.
As the world economy moves toward a post-US-Iran war, it cannot simply switch to more expensive energy and expect to function normally, he added.
“The world needs more energy. We cannot say, ‘OK, I’ll give you energy, but it’s going to be double or quite double the current price, and still do the same thing.’ The economics don’t work this way,” he stressed.
Turning to Europe’s economic challenges, Al-Rumayyan said investment is the only path forward as summit discussions focus on whether Europe is heading toward an inflation point.
“The challenges is mainly regulatory challenges, and some of the laws that were supposed to be activated is really hurting investors, such as ourselves,” he said, explaining that PIF has invested nearly $100 billion across the continent since 2017, creating approximately 160,000 jobs.
“The good thing is the European regulators and policy makers are looking into it, and hopefully we’ll have better solutions.”
Al-Rumayyan also discussed PIF’s recently approved five-year plan to 2030, noting the recalibration of its investment strategy inward was a natural evolution, but the sovereign fund will not stop investing internationally altogether.
“If you look at what PIF did since 2016, we basically brought the Kingdom of Saudi Arabia to the world, and now our new strategy is to bring the world back to Saudi,” he said.
He outlined six new ecosystem focus areas: tourism, urban development, advanced manufacturing, industrial and logistics, clean energy, and NEOM.
“We will stop deploying investments internationally. I can tell you that we’re not gonna stop. We’ll continue deploying investments, but maybe the percentages are going lower, but the absolute numbers will continue growing since we have continuous growth.”
