The US is increasingly frantic in its search for replacements for lost oil supplies from Russia as it tries to patch up diplomatic differences abroad and boost domestic production to keep fuel prices out of control.
Jennifer Granholm, the US Secretary of Energy, told industry leaders on Wednesday that the country is under “martial law,” adding: “That means you’re producing more right now, where and if you can.”
Her call for domestic oil companies to boost supplies is a turning point for the Biden administration, which has reaffirmed its green reputation by highlighting a new political reality after the US banned oil and gas imports from Russia this week.
In another sign of the unrest caused by the Russian oil ban, the US has come under fire from Colombia, one of its main South American allies, for allegedly laying the groundwork for a resumption of Venezuelan crude oil imports.
Over the weekend, U.S. diplomats visited Venezuela, with which Washington severed diplomatic relations in 2019, which experts say could lead to a relaxation of sanctions on the country.
Gasoline prices have risen to new records, topping $4.25 a gallon in the US, which could cause political damage to President Joe Biden ahead of the congressional elections.
U.S. domestic oil production, which plummeted during the pandemic oil price crash, remains well below its all-time high in part because investors have advised companies to prioritize dividends and cash flow over new drilling campaigns.
Granholm, speaking at the CERAWeek conference in Houston, called on the US oil sector to enter into a new partnership with the federal government. “At this moment of crisis, we need more oil supplies,” she said.
Brent, the international oil benchmark, rose to $139 a barrel, its highest level since 2008, earlier this week. It fell to $111 on Wednesday, partly under pressure after the United Arab Emirates said it would encourage other OPEC members to increase oil production, becoming the first producer alliance member to do so since Russian troops invaded Ukraine.
Granholm’s comments came a day after Amos Hochstein, a senior US State Department official, said shale oil producers should do “everything possible” to increase supply.
The US overture to Caracas raised concerns among Colombian government officials, who told the Financial Times that enlisting the support of Venezuelan Nicolás Maduro’s regime to supply more oil would be both politically problematic and technically impossible.
“It is not for me to judge or justify,” said Ivan Duque, President of Colombia. “But nothing will change my opinion that Maduro is a war criminal or the equivalent of a Latin American [Slobodan] Milosevic because he hardened his own country,” he added, referring to the late leader of Serbia.
Duque added that the US, along with many other Western governments, will not recognize Maduro as the legitimate president of Venezuela after Washington branded the 2018 election as rigged.
“If you’ve just banned oil from what they call a Russian dictator, it’s hard to explain why you’re going to buy oil from a Venezuelan dictator,” Colombian Energy Minister Diego Mesa said in a separate interview on the sidelines of the CERAWeek conference.