US Officials Press Devon Energy to Offset 16 Million Barrels Loss
US officials urged producers including Devon Energy to boost output after a 16 million barrels per day supply loss caused by a Strait of Hormuz closure, with crude futures at $98.30 and Dated Brent hitting record highs. Executives warned of future price declines and showed reluctance to fund new drilling.
1. Government Plea for Increased Output
Interior Secretary Doug Burgum and Energy Secretary Chris Wright hosted a videoconference with over a dozen executives from Exxon Mobil, Chevron, Devon Energy and others to urge immediate production increases.
2. Global Supply Shock
Closure of the Strait of Hormuz and damage to Gulf facilities have removed an estimated 16 million barrels per day from global markets, sending crude futures to $98.30 and Dated Brent to record highs.
3. Industry Response
While some executives reported modest production upticks, most expressed hesitation to allocate windfall profits toward drilling new wells given expectations of price drops later this year.
4. Political and Market Implications
With gasoline prices surging ahead of the November midterms, the administration views higher output as a short-term fix, emphasizing that the disruption should last weeks rather than months.