Some of the world’s biggest oil companies plan to ramp up production as U.S. gas prices surge to $4 a gallon
A pumpjack sits on the outskirts of town in the Permian Basin oil field in Midland, Texas. | Spencer Platt/Getty ImagesHOUSTON — Executives at some of the world’s biggest oil and gas producers said on Monday they are ramping up their crude production as U.S. gasoline prices surge to $4 a gallon amid expectations that President Joe Biden and Congress would ban imports of Russian petroleum — but the companies warned not to expect new supplies overnight.
But even with those sharp increases, keeping a lid on oil and gasoline prices will be difficult if Russia’s 5 million barrels per day of oil exports are taken off the market. The U.S. industry imports only a modest amount of Russian oil and refined products, but trading firms around the world are beginning to shun Russian supplies as governments tighten the financial sanctions on Russia in response to President Vladimir Putin’s invasion of Ukraine.
Still, James Burkhard, head of oil markets for IHS Markit, said the Biden administration was likely looking for the backing of OPEC, whose members would need to boost output if countries were to try to ban Russian supplies. Biden has pledged to try to shield U.S. consumers from the energy market fallout, but that plan has been undercut by the images of bombings and attacks that have sent Ukrainians scrambling to flee the country and are driving up the civilian deaths. Lawmakers from both parties in Congress are working on bills to inflict greater pain on the Russian economy.
John Hess, CEO of oil and gas producer Hess Corp., said last week’s announced oil release, part of international disbursement of 60 million barrels, was too modest to affect the market. The Biden administration release amounts to about 1.5 days of U.S. consumption.
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