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CERAWEEK With the oil market in turmoil, energy leaders demand more production and security

  • Oil producers must increase production – Hess
  • Kerry calls Russia’s actions ‘abhorrent’
  • Several thousand attendees at the Houston conference

March 7 (Reuters) – Oil and gas executives pleaded at an industry conference on Monday for greater security of energy supply and increased fossil fuel production, while the U.S. envoy for the climate called for the development of renewable energy as oil prices soared after the Russian invasion of Ukraine. .

The CERAWeek energy conference opened in Houston on a day when global crude prices reached levels not seen since the 2008 financial crisis. Buyers are shunning Russian crude and fuel exports, creating what could to be the biggest disruption to the world’s energy supply in decades. Russia exports 4-5 million barrels of crude and 2-3 million barrels of products daily.

“It is about how we will survive this crisis. There is no capacity in the world today that can replace 7 million barrels of exports,” said the Secretary General of the OPEC, Mohammad Barkindo.

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The CERAWeek conference was initially to focus on energy transition technologies and an increased role for renewable energies. Instead, many participants focused on energy security and reliability, as many countries, especially Europe, rely heavily on Russia for fuel.

During a press conference, Barkindo reiterated the need for more investment in oil and gas. He and others said the lack of investment in previous years had partly caused the market to tighten.

“What is happening in Europe today is a big wake-up call for many decision makers if they are serious about security of supply, accessibility and of course climate change compatibility. “, said Patrick Pouyanne, CEO of TotalEnergies, during the CERAWeek conference in Houston.

TotalEnergies is one of the few oil majors that has not divested from Russia, although Pouyanne said the company is not investing additional capital in the country.

Several speakers addressed Russia’s invasion, beginning with US climate envoy John Kerry, who called Russia’s actions “abhorrent”.

“It’s a defining moment for this century,” Kerry said. He said people now have to live with higher energy costs for a while and that the Biden administration supports a comprehensive energy policy that includes natural gas and nuclear power.

Renewable energy proponents say the invasion makes the transition to cleaner fuels more desirable, and that further investment in fossil fuels will only increase the world’s dependence on oil and gas at a time when the climate continues to warm up.

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

Global benchmark Brent crude briefly rose above $139 on Monday – not far from its all-time high of $147.50. It was last trading around $126. Read more

Analysts say the high prices could persist for months as the United States and the European Union consider an outright ban on buying energy from Russia. Sources said Washington was considering moving forward on its own, a step the White House had previously resisted. Read more

The United States exports “12 billion cubic feet per day of natural gas and 3 million barrels per day of crude oil,” Hess (HES.N) chief executive John Hess told a panel. “It is very important for the United States to stand up here and ensure the energy security of the country and the world.” Read more

European countries account for about half of Russia’s crude oil exports, according to the US Energy Information Administration. Read more

Saudi Arabia, leader of the Organization of the Petroleum Exporting Countries, and Russia are part of a group known as OPEC+ which has increased supply by 400,000 bpd each month to restore pandemic-related production cuts since 2020.

The United States and others have called for even bigger increases from OPEC+, but producers have consistently fallen short of the targeted increases. On Monday, OPEC+ sources said oil market fundamentals remained healthy, downplaying the prospect of additional new supply. Read more

After cutting spending and production at the height of the COVID-19 pandemic, the industry has been unable to keep up with consumption growth: the United States still produces over a million barrels below their 2019 peak of 13 million bpd.

Russia exports between 4 and 5 million barrels of crude per day and around 8.5 trillion cubic feet of natural gas per year.
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Reporting by Liz Hampton, Ron Bousso, Sabrina Valle, David Gaffen and Marianna Parraga; Editing by Kenneth Maxwell, Toby Chopra, Marguerita Choy and David Gregorio

Our standards: The Thomson Reuters Trust Principles.