Rising energy prices have given new impetus to voices calling for the United States to increase its oil and gas production, but companies have recently shown reluctance to pump much larger quantities.
After oil prices declined at the beginning of the Covid-19 epidemic, they gradually rose in the past months until recently, for the first time since 2014, they crossed the threshold of one hundred dollars a barrel, in light of the escalation of the situation, leading to the Russian military attack on Ukraine.
However, the oil companies, whether major such as ExxonMobil and Chevron or smaller ones, were keen not to take advantage of the return to record profits in order to increase their production at any cost.
But with the recent recovery in energy prices, the American Petroleum Institute, the largest association of energy producers in the United States, considered President Joe Biden to change direction.
The union called in Biden’s tweet to authorize more energy extraction projects on federal lands and at sea, expedite the procedures for issuing permits and cancel administrative transactions.
“At a time when the crisis in Ukraine is escalating, US energy leadership is more important than ever,” the union wrote on Twitter.
Republicans in Congress also raised their voices to express their opposition to the White House’s energy and environmental policy in light of the current situation in Ukraine.
Among the most prominent measures Biden has taken in this context is the abolition of the Keystone XL oil pipeline and the imposition of restrictions on energy projects on federal lands.
Senator from Louisiana Bill Cassidy called on the United States to “flood” the world with low-cost energy in order to “eliminate” the Russian “war machine” financed by oil revenues. The analyst at the “Third Bridge” investment company said that the companies in the sector will not suddenly change their strategies. He called on everyone not to pump huge amounts, whether shareholders or investors keen on social problems or President Joe Biden.
Previously, oil prices exceeded a hundred dollars a barrel, and every time they came back and fell suddenly.
And the Westerners took into account in their response to the invasion of Ukraine by placing Russia in the field of energy as the third producer of crude in the world and the supplier of Europe with 40% of its gas imports.
“It is unlikely that a large-scale military conflict between Russia and the West will erupt, but a large-scale economic war is almost inevitable,” wrote Jarand Reichstad, head of the office of “Reichstad Energy”, noting that Russia might use its energy exports as a weapon.
US oil producers have refrained, at least until recently, from increasing their investments in new projects.
In this context, Devon Energy announced last week that it is not scheduled to increase its investment spending in 2022 even if profits recorded a significant increase.
When Chevron Group’s annual results were published at the end of January, its president, Mike Wirth, pledged “the need for discipline” in the field of investments, stressing that the company’s expectations for long-term oil prices “have not changed much.” (AFP)
