Wed. Aug 17th, 2022

The head of Pioneer Natural Resources warns that the US won’t be able to replace Russia’s shortfall

Global prices for crude may surge to $200 per barrel if Russian oil and gas are banned, warns Scott Sheffield, the chief executive of the US’ biggest shale oil operator, Pioneer Natural Resources.

“The only way to stop Putin is to ban oil and gas exports,” Sheffield said, as quoted by the Financial Times. “[But] if the Western world announces that we’re going to ban Russian oil and gas, oil is going to go to $200 a barrel, probably – $150 to $200 easy.”

Sheffield warned that the US would be unable to replace crude supplies from Russia in 2022, stressing that it would take many months for America’s shale oil patch to effect the necessary boost to its output.

Read more

US unveils Russia oil and gas sanctions plan

US producers are currently hampered by supply chain constraints as well as by demands from Wall Street that operators use their oil price windfall to pay dividends instead of drilling more wells, he explained.

“We can’t change this year,” he told the media. “I’m talking about a two- to three-year plan. Because US shale, even if somebody adds a [drilling] rig … it takes six to eight months to get first production. There’s labor shortages, there’s frack fleet shortages, there’s rig shortages, there’s sand shortages.”

On Friday, US Secretary of State Antony Blinken rejected calls for energy sanctions to be imposed immediately on Russia, arguing that such action would harm Americans more than Moscow.

For more stories on economy & finance visit RT’s business section