“More investment is needed in the oil and gas sector right now and tomorrow,” Hochstein was quoted as saying.
The top oil producers in the Middle East have been warning for years that the recent slump in investment in the industry would come back to haunt global supply. Underinvestment is one of the key reasons for high oil prices, the world’s largest oil firm and top crude oil exporter, Saudi Aramco, says.
Very low spare capacity and underwhelming investment in new supply in recent years have combined with the Russian invasion of Ukraine, and the subsequent market chaos with changed trade flows to push oil and gas prices higher.
At ADIPEC, Hochstein said that “energy prices have to be priced in a way that allows for economic growth.”
The U.S. Administration has been looking to lower gasoline prices and has released more than 100 million barrels from the Strategic Petroleum Reserve (SPR) so far this year. The Administration and President Joe Biden have repeatedly called on oil companies “to stop profiteering and lower prices at the pump.”
Earlier this month, American Petroleum Institute (API) President and CEO Mike Sommers said in response to one of the latest comments from the U.S. Administration that “Increasing energy demand and constrained supply coupled with geopolitical instability and faulty policy decisions have driven fuel prices higher.”
“At a time when American energy can be a stabilizing force at home and abroad, we urge caution in continuing to rely on short-term efforts that are no substitute for sound long-term policies that enable American energy leadership.”
“The administration should instead focus on addressing the fundamental economic and security challenges we face by spurring more investment in American energy, infrastructure and markets that enable U.S. consumers to benefit from America’s reliable energy resources,” API’s Sommers noted.
By Tsvetana Paraskova for Oilprice.com
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