Oil prices have been on a roller-coaster ride due to rampant geopolitical uncertainty following Russia’s invasion of Ukraine.

Amid escalating conflict, which has thrown the already volatile global oil and gas markets into a frenzy, the push for U.S. sanctions on Russian energy has given rise to discussions on the critical role of American natural gas and oil industry in supplying lost barrels to the market.

“One of the obvious places where you can switch on supply relatively quickly is the Permian,” Bill Farren-Price, director of Enverus Intelligence Research, told Hart Energy.

Despite significant hurdles to increasing domestic oil and gas production like supply chain constraints, Farren-Price noted that if the U.S. government decides to make it a “strategic priority” to facilitate the U.S. oil and gas industry, they can get significant results by the end of the year.

Skyrocketing energy prices is threatening the health of economies and the livelihoods of the people, which is forcing countries to diversify energy supplies. As one the leading producers of natural gas, U.S. can balance markets by ramping up domestic gas production, according to Tom McNulty, managing director of Houston-based global investment banking firm Chiron Financial.

“U.S. should work to exceed 100 billion cubic feet per day of gas production as soon as possible, both to protect economies and to help displace much dirtier forms of energy production that are otherwise inevitable in the near term,” McNulty said.

He continued, “Energy is a physical business and adding more LNG supply into Europe is not an easy thing to do fast, because there is limited import capacity available now and there is strong competition from Asia for the gas. The traditional model for LNG development has to be changed to make the process faster so that the U.S. can export much more of its natural gas as LNG to help balance the global gas market.”

Policies needed

Even before the Ukrainian conflict, markets were sending a strong signal that the world urgently needs more gas. As the energy crisis intensifies, U.S. natural gas has been instrumental in shoring up U.S. energy supplies. But more can be done.

“We must realize that the U.S. can do more and needs to do more,” said Dustin Meyer, vice president of the American Petroleum Institute (API) Natural Gas Markets, speaking during a media briefing on March 3.

Meyer added that API is certainly not alone in believing that the “current conflict in Ukraine is poised to fundamentally and permanently alter the European energy map.”

For example, Germany—the largest gas consumer in Europe and heavily independent on Russian gas—is fast-tracking the development of two LNG import terminals.

“It is imperative—now more than ever—that the administration reassures its allies that the U.S. will remain a reliable supplier of natural gas both now and in the future,” Meyer said.

This shift away from Russian gas will not happen overnight, he said. In fact, for it to happen at all, the U.S. needs a clear and consistent energy policy.

“Unfortunately, that’s not really what we have right now,” he noted.

“For example, several LNG export approvals are waiting at the DOE, for which the department has not provided any timeline as to when or if permits will be issued,” he said.

To dampen the effect of the international crisis on gas prices, the White House this week agreed to release 30 million barrels oil from its strategic reserves.

While this was a good move, the only long-term solution to ensure energy security is growing America’s energy leadership, said Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the API.

“With energy costs rising around the world, the Biden administration should take steps right now to ensure more American oil and natural gas reaches markets as soon as possible,” Macchiarola said.

‘Produce more’

In another recent development, a White House official said U.S. oil and gas companies could increase production following pushback from the industry for not tapping U.S. shale to combat high oil prices.

“Prices are quite high, the price signal is strong. If folks want to produce more, they can and they should,” White House National Economic Council Deputy Director Bharat Ramamurti said in an interview on March 1.

Ramamurti also said that there are 9,000 unused leases, which the U.S. government has provided for production.

Chevron CEO Mike Wirth also expressed optimism on U.S. government revisiting its stance on new domestic oil production, adding that achieving long-term energy security for the U.S. would include an “attitude to support investment” in oil production growth.

"We have a lot of common ground," he said, referring to recent talks with the U.S. government that had focused on climate concerns and limiting carbon emissions.