The U.S. energy secretary said on March 22 that the Biden administration believes producers will boost U.S. oil supply by the end of the year, two weeks after she urged them to raise output quickly in the wake of the Russian invasion of Ukraine.
Energy Secretary Jennifer Granholm said at the CERAWeek energy conference in Houston this month that any oil and gas company that can increase supply should do so quickly after President Joe Biden banned U.S. imports of Russian oil.
Russia, one of the world's top petroleum producers, accounts for about 8% of U.S. imports of liquid fuels. Last year, the United States imported about 672,000 barrels per day of Russian crude oil and refined fuels.
The administration is confident that "there will be a significant increase in supply by the end of this year, and we're hopeful that they live up to that" Granholm said referring to oil producers in a conference call with reporters.
She said public and private talks at the Houston conference focused on ramping up supply, but suggested that higher oil production could take time.
"You can't just flip the switch and have them come on overnight," Granholm told reporters about oil rigs.
Even though the U.S. oil rig count has climbed for a record 18 months in a row, the increases have small and oil production was still far from pre-pandemic record levels as many companies focus more on returning money to investors rather than boosting output.
U.S. crude production slipped for a second year in a row to 11.2 million bpd in 2021 from a record 12.3 million bpd in 2019. Output is expected to recover to 12 million bpd in 2022 and 13 million bpd in 2023, according to the Energy Information Administration, the independent statistics branch of the Energy Department, forecast in March.
Oil companies such as Chesapeake Energy and Occidental Petroleum have said that shortages of equipment, supplies and labor could limit growth in the short term.
Recommended Reading
What's Affecting Oil Prices This Week? (March 11, 2024)
2024-03-11 - Stratas Advisors expects oil prices to move higher in the middle of the year, but for the upcoming week, there is no impetus for prices to raise.
Oil Dips as Demand Outlook Remains Uncertain
2024-02-20 - Oil prices fell on Feb. 20 with an uncertain outlook for global demand knocking value off crude futures contracts.
Oil Rises After OPEC+ Extends Output Cuts
2024-03-04 - Rising geopolitical tensions due to the Israel-Hamas conflict and Houthi attacks on Red Sea shipping have supported oil prices in 2024, although concern about economic growth has weighed.
Global Oil Demand to Grow by 1.9 MMbbl/d in 2024, Says Wood Mac
2024-02-29 - Oil prices have found support this year from rising geopolitical tensions including attacks by the Iran-aligned Houthi group on Red Sea shipping.
What's Affecting Oil Prices This Week? (March 25, 2024)
2024-03-25 - On average, Stratas Advisors are forecasting that oil supply will be at a deficit of 840,000 bbl/d in 2024.