Dropping the price of oil is not really that difficult. The current challenges are mostly around uncertainty:
drilling and production can not easily be financed since the economics are based on price of oil that can vary from $40 - $120 - (4-fold, ignoring the -$40/bbl fluke)
financing gets even tougher by the "bad name" exploration and production has acquired, some don't want to be involved with the commodity
People, sadly the upstream industry has been very free with layoffs and cuts in pay, so people that find an alternative will not come back for normal pay, oil companies/service providers (more the later) will need to provide a very high salary and a very high exit package should an employee be released. I don't think the services companies are ready for that, too used to being in charge.
Supply chain, getting parts and pipe will be expensive
Having said that, with a little support and loan guarantees, you can bring the Permian and Eagle ford back in 3 - 6 months, and gas in Appalachia in about the same time (just fix what we have and wait for new part). Just guessing...
I think the bigger/est issue for Europe will be actually getting the oil to the refineries in the event they go full embargo and getting running that oil in their assets. Then, its not even clear if those operations will be able to hit full capacity running a different crude.
Sure, prices are relatively easy to change if you can get OPEC+ to increase output, but I suspect that they will keep them up high so that Russia can extract as much money as possible while the oil is still flowing.
I wouldn't be surprised to see LNG exports from the US approaching max capacity, and they were already up significantly before Russia invaded Ukraine.
Dropping the price of oil is not really that difficult. The current challenges are mostly around uncertainty:
drilling and production can not easily be financed since the economics are based on price of oil that can vary from $40 - $120 - (4-fold, ignoring the -$40/bbl fluke)
financing gets even tougher by the "bad name" exploration and production has acquired, some don't want to be involved with the commodity
People, sadly the upstream industry has been very free with layoffs and cuts in pay, so people that find an alternative will not come back for normal pay, oil companies/service providers (more the later) will need to provide a very high salary and a very high exit package should an employee be released. I don't think the services companies are ready for that, too used to being in charge.
Supply chain, getting parts and pipe will be expensive
Having said that, with a little support and loan guarantees, you can bring the Permian and Eagle ford back in 3 - 6 months, and gas in Appalachia in about the same time (just fix what we have and wait for new part). Just guessing...
I think the bigger/est issue for Europe will be actually getting the oil to the refineries in the event they go full embargo and getting running that oil in their assets. Then, its not even clear if those operations will be able to hit full capacity running a different crude.
Sure, prices are relatively easy to change if you can get OPEC+ to increase output, but I suspect that they will keep them up high so that Russia can extract as much money as possible while the oil is still flowing.
I wouldn't be surprised to see LNG exports from the US approaching max capacity, and they were already up significantly before Russia invaded Ukraine.
Maybe higher interest rates will help us?