Chevron Calls On Biden to Support U.S. Oil as Russia Raises Risks

(Bloomberg) -- Chevron Corp. said any short-term efforts by the Biden Administration and its allies to ease crude prices should be backed up by long-term commitments to support investment in America's domestic oil industry.

President Joe Biden and other major economies have agreed on a coordinated release of 60 million barrels of oil from stockpiles around the world after Russia's invasion of Ukraine, people familiar with the matter said Tuesday. Without a “balanced and pragmatic conversation” about energy security and transition, such a move would have little long-term effect, Chief Executive Officer Mike Wirth said on a call with reporters.

“What would be best to accompany” a reserve release “would be an attitude to support investment in U.S. resource development,” Wirth said. That would “ensure that this country remains strong from an energy security standpoint.”

The domestic oil industry has felt shunned by the Biden administration since it took office due to restrictions on drilling Federal lands in its early days, followed up by pleas to OPEC to increase oil production once prices became elevated. As the war in Ukraine brings the possibility of sanctions that would limit the trade in crude from Russia -- one the world's biggest producers -- America's oil industry could be one of Biden's best ways of reducing energy prices.

“In the early months, I wish there had been more dialog than there was,” Wirth said at a presentation later with analysts in New York. “The administration had their priorities and the interaction with us was lower on the list than some other things.”

Leading oil executives believe governments including the U.S. have been lulled into a false sense of security on cheap oil and gas supply over the past decade, partly due to the growth in shale, while focusing too heavily on climate change. Now, with commodity shortages and prices skyrocketing around the world, it's time for a change, they say.

Devon Energy Corp. CEO Rick Muncrief said Monday he was “mystified” why there hadn't been any dialog between the administration and oil producers at a time when the country is facing severe energy challenges. An appeal from the president may have provided some incentive for U.S. shale to accelerate production growth and ease what's fast-becoming a major driver of cost-inflation around the world, Muncrief said.

Senator Joe Manchin, a West Virginia Democrat, joined the fray Monday evening, calling for a series of hearings on energy independence.

“We produce energy cleaner than anybody in the world,” Manchin said. “We're buying 650,000 barrels a day from Russia. It's ridiculous. Totally ridiculous.”

Chevron hopes to have “good, constructive dialog with this administration going forward,” Wirth said. There's much “common ground” between both the government and oil industry's goals, he added.