War in Ukraine puts pressure on US oil sector

In the oil fields of northern Montana, industry veteran Mac McDermott saw crude prices soar from $75 a barrel in January to more than $120 when Russia invaded Ukraine, and drop again as fears of coronavirus in China raised the possibility of a global economic slowdown.

McDermott said his family’s oil company will moderately increase drilling if crude prices stabilize.

But for the next few months, he is waiting on the sidelines and slogging away to get enough workers for the hundred or so wells the company operates. That includes some that sat idle during the pandemic.

The president’s decision Joe Biden to suspend imports of Russian oil due to the Russian invasion of Ukraine was met with Republican demands to increase US production to combat rising gasoline prices.

The White House he also called for more drilling and mentioned the war, brushing aside Biden campaign promises to curb drilling on public lands due to global warming.

But the political rhetoric contrasts with the reality in the country’s oil fields: insufficient labor, little money to invest in exploration and fears that high prices will not last, according to industry representatives, analysts and state officials.

“It would be excellent to produce more nationally. (But) it’s so volatile. We haven’t had access to capital for years. If we drill, the money would have to come from existing production. It is riskyMcDermott said.

Oil-state Republicans have ignored the industry’s logistical limits, blaming Democrats and Biden for slow growth in the sector. Senator from Texas, Ted Cruz, and the senator from Mountain, Steve Daineshave called for the US energy industry to be “unleashed” and opening more public lands to drilling.

Daines accused Democrats of using the Russian oil ban to cover up an alleged scheme to “ban all oil”.

United States doesn’t matter much oil Russia and the Biden administration has effectively suspended new sales of federal land and water leases for oil and natural gas exploration.

But it has approved nearly 4,000 new permits for drilling on federal land, and companies have thousands more in the pipeline. White House press secretary Jen Psaki said companies should use those permits to “get more resources out of the ground.”