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With oil market in turmoil, energy execs urge more output, security -Breaking

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© Reuters. FILEPHOTO: This illustration shows a 3D-printed oil pump head positioned in front of a displayed stock graph. It was taken on April 14, 2020. REUTERS/Dado Ruvic/Illustration

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By David Gaffen

(Reuters). Oil-and-gas chief executives lobbied Monday at an industry conference to increase security of energy supply. Meanwhile, the U.S. Climate Envoy urged for development of renewable energies as prices rose following Russia’s invasion.

Houston saw the opening of the CERAWeek conference on energy in Houston at a time when crude oil prices were higher than ever since 2008’s financial crisis. As buyers turned away from Russian fuel and crude, this created the most significant disruption in world energy supply history. [O/R]

Hess (NYSE 🙂 Chief Executive John Hess told a panel that oil producers must intensify efforts to get more oil onto the markets. [nL2N2VA1PZ]

At a conference originally planned to be focused on energy transition technologies, and an increased role for renewables globally, other industry executives echo his comments.

Many participants instead have been focusing on energy safety and reliability as many countries, especially Europe, heavily rely on Russia for their fuel.

Hess reported that the United States exports 12 billion cubic feet per day, and 3,000,000 barrels every day. The U.S. must be strong here to ensure energy security for both the U.S. and the rest of the world.

Patrick Pouyanne, CEO of TotalEnergies told Houston’s CERAWeek conference that “what is happening in Europe today is a major wake-up call for a lot policymakers”

TotalEnergies remains one of few major oil companies that have not divested Russia. Pouyanne stated however, the company will not be investing any additional capital there.

Numerous speakers spoke out about Russia’s invasion. John Kerry (US climate envoy) was the first to speak, calling Russia’s actions “abhorrent”.

Kerry declared, “This is an important moment in this century.” According to Kerry, people will have to accept higher energy costs and the Biden Administration supports an energy policy which incorporates natural gas as well as nuclear power.

Renewables advocates claim that the invasion increases the desire to transition to cleaner fuels. Further fossil-fuel investments now would only make the world more dependent on oil and natural gas, at a time where the climate is still warming.

“You already see what’s happening with global temperatures up by 1.2 degrees (Celsius),” Kerry said.

The global benchmark briefly crossed $139 Monday, just short of its record high of $147.50. Last trading was at $126.

Analysts fear that high energy prices will continue for many months as both the United States of America and the European Union consider banning Russia from buying their oil. Sources claim Washington may be considering proceeding alone. The White House previously had resisted this step.

Russian oil sales are estimated at 4-5 millions barrels per day (bpd). This is more than any country other than Saudi Arabia. According to U.S. Energy Information Administration, roughly half those oil purchases are made by European countries.

Russia, Saudi Arabia and Russia, the leaders of the Organization of the Petroleum Exporting Countries (OPEC+), have been increasing their supply by 400,000 bpd per month since 2020 to restore the output losses related to pandemics.

While the United States and other countries have called for further increases by OPEC+ members, producers continue to fall short of achieving their targets. Monday’s OPEC+ source said that oil markets fundamentals remained solid, downplaying any possibility of additional supply.

After reducing production and spending during the COVID-19 pandemics, the industry is now in an insurmountable state. The United States still produces more than one million barrels less than its peak in 2019, which was 13 million bpd.

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