Saturday, 18th May, 2024
Saturday, 18th May, 2024

Biden’s oil, gas drilling ban may end offshore Gulf of Mexico work

President Joe Biden’s temporary halt to drilling on federal lands has largely affected U.S. crude production, although it could be the death knell for the Gulf of Mexico’s already dwindling output.

According to Artem Abramov, head of shell research at Ristad Energy, if the halt announced on Wednesday were made permanent, output in the United States could fall by 200,000 barrels a day by the end of this decade. This is a small fraction of about 11 million barrels a day in American production.

“The area that will be affected by the ban is the deep waters of the Gulf of Mexico as it is wholly owned by the government,” said Elizabeth Murphy, an upstream analyst at ESAI Energy LLC North America. That would mean a 40% output drop for the Gulf by 2030, he said. This is one of the corners of the U.S. oil industry that has already seen investments shrink in recent years, with drillers focusing mostly on shells.

For the oil market, Biden’s restrictions on the fuel industry, the lack of an urgent basis to focus on financial spending and lift sanctions on Iran could support crude prices this year and later, Goldman Sachs Group Inc. Said last week. As a result of the drumming ban, Abramov sees no short-term price effect.

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