American shale producers warned Europe that they won’t be able to pump enough oil and gas to alleviate Europe’s energy crisis, according to The Financial Times.
The European Union (EU) will ban Russian oil imports by the end of 2022 meaning that Europe will have to rely on other producers to fill supply gaps; however, U.S. shale companies will be unable to ramp up production in time as their exports of oil and liquefied natural gas to Europe have already reached maximum levels, the FT reported. The EU proposed placing a price cap on individuals’ utility bills on Wednesday as natural gas shortages are causing household energy bills to skyrocket, according to the European Commission.
“We’re not adding [drilling] rigs and I don’t see anyone else adding rigs,” Scott Sheffield, CEO of Pioneer Natural Resources, told the FT. “I don’t see it coming,” he added when asked about fuel production stepping up to meet Europe’s demand.
Treasury Secretary Janet Yellen warned Sunday that the European Union’s ban on Russian oil could raise global fuel prices. Crude prices could rise to over $120 per barrel this winter as supplies become more scarce, Sheffield told the FT.
“It’s not like the US can pump a bunch more,” one of shale’s biggest investors told the FT. “There’s no bailout coming … not on the oil side, not on the gas side.”
Oil sales from Russia, the world’s largest petroleum exporter, could fall by nearly 20% when the EU embargo comes into effect, according to the International Energy Agency. Brent crude oil prices rose 1% to $94 a barrel on Wednesday following the IEA’s report, according to the FT.
The current price of brent crude oil is $92.37 per barrel which is $17.88 higher than the price per barrel in September 2021.
The European Commission did not immediately respond to the Daily Caller News Foundation’s request for comment.
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