Trump administration officials urged US oil producers to boost output, driving home a message to the industry that’s become more urgent amid the war in Iran.
Interior Secretary Doug Burgum and Energy Secretary Chris Wright made their plea during a videoconference Thursday with roughly a dozen oil executives, including representatives of Exxon Mobil Corp., Chevron Corp. and Continental Resources Inc.\
President Donald Trump’s team has for months pushed the industry to produce more oil. But now the administration is grappling with a global supply shock caused by the effective closure of the Strait of Hormuz, which normally carries roughly a fifth of the world’s oil and liquefied natural gas supplies.
Paralysis in the Strait, combined with damage to Gulf energy facilities, has yanked an estimated 16 million barrels per day of crude from the world market, sending oil and gasoline prices soaring. That, in turn, has created an acute political risk for Trump’s Republicans ahead of the November midterm elections.
Other companies represented in the meeting Thursday included Hilcorp Energy, Diamondback Energy Inc., Devon Energy Corp. and Occidental Petroleum Corp.
While futures contracts for global crude were at $98.30 Thursday, traders are bidding far higher than that for physical deliveries. Dated Brent, the world’s most important price for real-world oil barrels, reached a record high earlier this month before retreating.
Wright reiterated his assertion that the disruption will endure for weeks — not months. That’s in line with a refrain from other administration officials — including Trump — who have cast the price increases for oil and gasoline as a short-term blip.
“They’re not very high, if you look at what they were supposed to be, in order to get rid of a nuclear weapon, with the danger that entails,” Trump told reporters Thursday at the White House.
Details of the 40-minute meeting were shared by an administration official and people familiar with the matter who asked not to be named because the conversation was private. The virtual gathering was subdued, a person said.
US officials have argued the surge in crude will entice companies to increase production. But executives have been reticent to spend the current windfall on drilling new wells, especially as futures point to a steep decline in prices over the coming months.
Oil executives largely refrained from relaying those concerns during the call, according to the people. Some executives volunteered that they were boosting production.
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