(OIL PRICE) – The days of explosive growth in U.S. shale oil production are over. American oil production is rising, but at a much slower pace than it did before the 2020 crash, and at lower rates than expected a few months ago.
The new priorities of the shale patch – capital discipline and a focus on returns to shareholders and debt repayments – have coupled with supply chain constraints and cost inflation to drag down U.S. oil production growth.
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The Biden Administration’s mixed signals to the American oil and gas industry, with frequent blaming of the sector for high gasoline prices and, most recently, a threat of more taxes, are not motivating U.S. producers, either. Many are reluctant to commit to spending more on drilling when there isn’t any medium-to-long-term vision of how the U.S. oil and gas resources could be used to boost America’s energy security and help Western allies who depend on imports.