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March 9, 2022

US oil industry told to boost supply as energy prices skyrocket

The US domestic oil industry is under pressure to ramp up production as the Biden administration’s ban on Russian energy imports pushes up prices.

By Scarlett Evans

US officials are ramping up pressure on the nation’s shale industry to boost domestic production and curb reliance on Russian imports, as Biden’s new ban on Russian imports takes effect. 

Announcing the measure, President Biden said that Russian oil, gas, and energy would be targeted, stating: “Today I’m announcing that the US is targeting the main artery of Russia’s economy.” 

A White House statement added: “Americans will also be prohibited from financing or enabling foreign companies that are making investments to produce energy in Russia.” 

To counter skyrocketing oil prices and meet the demand gap that banning Russian supplies would leave, the Biden administration has turned its attention to domestic shale producers, telling them to do “whatever it takes” to boost supplies and balance out the market.  

Brent crude prices have reached $127.98 a barrel — an increase of more than 50% from the beginning of this year.  

State Department senior adviser Amos Hochstein, at energy industry event CERAWeek, took the opportunity to defend and clarify President Joe Biden’s energy policy following news of the ban, which was announced 8 March.  

Specifically, Hochstein disputed claims that the administration “is somehow holding back or is responsible for the industry not being able to produce a rising amount of oil”. 

He added that the US, in conjunction with its allied nations, was considering releasing more oil from emergency reserves to try and meet demand without Russian imports.  

“If we need to do something again on a global basis with our allies, we will,” he said. 

The ban against Russia will reportedly see a loss of between three and four million barrels a day from US supplies, and with US production remaining hampered by impacts of the pandemic – sitting at around 11.6 million barrels per day – concerns remain that the country will struggle to meet demand, and that dialogue is needed between the US Government and private oil producers to counter this challenge. 

Russia has surpassed North Korea and Iran to become the most sanctioned nation in the world, just 10 days after President Vladimir Putin launched his attack on neighbouring Ukraine. 

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