The oil and gas industry needs more investment, Amos Hochstein, US Senior Advisor on Energy Security, said at the ADIPEC energy conference in Abu Dhabi on Monday.
“Further investment is needed in the oil and gas sector now and tomorrow,” Hochstein was quoted as saying.
The Middle East’s top oil producers have been warning for years that a recent slump in investment in the industry would again disrupt global supply. Underinvestment is one of the main reasons for high oil prices, the world’s largest oil company and top crude oil exporter, Saudi Aramco, says.
Very low volumes used and low investment in new supply in recent years combined with Russia’s invasion of Ukraine, and subsequent market turmoil and altered trade flows to push oil and gas prices higher.
At ADIPEC, Hochstein said that “electricity prices should be set in a way that allows economic growth.”
The US administration intends to lower the price of oil and withdraw more than 100 million barrels from the Strategic Petroleum Reserve (SPR) so far this year. The Administration and President Joe Biden have repeatedly asked oil companies “to stop profiteering and low prices at the pump.”
At the beginning of this month, the American Petroleum Institute (API) President and CEO Mike Sommers said in response to one of the latest statements from the US Administration that “Increased energy demand and supply constraints combined with political instability and wrong policy decisions have driven oil prices are high.”
“At a time when American power may be stabilizing at home and abroad, we urge caution in continuing to rely on short-term efforts that do not replace sound long-term policies that allow for American power leadership.”
“The administration should instead focus on addressing the fundamental economic and security challenges we face by encouraging more investment in American energy, infrastructure and markets that enable US consumers to benefit from reliable American energy sources,” API’s Sommers said.
By Tsvetana Paraskova of Oilprice.com
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