OPEC officials and U.S. shale industry executives met at the CERAWeek conference this week to discuss the situation on global oil markets, and the results of the meeting do not seem particularly encouraging.
According to a Reuters report, several senior executives from U.S. shale had dinner with OPEC's outgoing secretary general, Mohammed Barkindo, including the chief executives of Hess Corp., EQT Corp, and Chesapeake Energy.
The report quoted Barkindo as saying one of the topics of discussion had been U.S. shale majors' decision to continue returning cash to shareholders rather than expanding production in response to higher oil prices.
"This massive under-investment requires us to revisit that," the OPEC head said, as quoted by Reuters. "This is up to the companies themselves and their boards ... but there's this general realization that something needs to be done" about oil prices.
The dinner took place on Monday when Brent briefly touched $139 on talks between the U.S. and Europe about sanctioning Russia's oil exports. These, including both crude and fuels, amount to an average of 7 million bpd and, according to OPEC's Barkindo, "There is no capacity in the world that could replace 7 million barrels per day."
In this context, which has prompted analysts to warn about even higher oil prices coming, it is no wonder that Germany's Chancellor Olaf Sholz took a stance at odds with that of the U.S. and the UK, saying on Monday that it would not impose sanctions on Russian oil and gas as they were essential for Germany's energy supply.
The U.S., meanwhile, might decide to go it alone with the sanctions, according to a Reuters report from earlier today. "We import such a smaller percentage of oil from Russia than the Europeans do ... it is very different circumstance," White House press secretary Jen Psaki told media.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More