The US oil companies have so far ignored the nascent demand for oil in Europe prompted by the promise to stop buying Russian oil, fearing that increased production will send the prices down below the point of sustainable extraction of crude, The New York Times has reported.
According to the 141 oil companies which had been surveyed by the Federal Reserve Bank of Dallas in March, most of them fear that opening new oil wells will drive the price below $56 per barrel required to break even on shale oil extraction. Both energy companies and investors are concerned that the period of high oil prices won't last long enough to cover the costs of drilling new wells.
Among other reasons why the US oil production increase was basically flat in recent months are a lack of workforce and sand, which is actively used to break shale fields and extract oil from them.
The New York Times notes that as a result of these fears and concerns it is unlikely that the American companies will be boosting their crude output in the nearest year of two.
At the same time, the EU countries are currently engaged in discussing the new package of sanctions against Russia, which reportedly might include the ban on purchases of Russian oil, which currently amounts to around four million barrels per day. The current levels of the US crude output can't substitute such volumes, while the US oil production grew over the past quarter by only around 200,000 barrels.
The European countries hope that they will be able to replace the Russian oil by buying it from other suppliers, specifically the US, after its president promised to lend a helping hand.
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