U.S. Energy Secretary Granholm urges oil and gas companies to increase production.

• To combat the surge in oil prices, Secretary of Energy Jennifer Granholm urged companies to increase production.
• To stabilize the market and minimize harm to American families, we must urgently increase short-term supply in a responsible manner, as stated on Wednesday.
• The White House has been accused by the oil and gas industry of hindering drilling through unfavorable policies, but officials have denied these allegations.

As oil prices have reached their highest point since 2008, Secretary of Energy Jennifer Granholm addressed a room full of energy executives with a straightforward message: increase production.

To stabilize the market and minimize harm to American families, we must urgently increase short-term supply in a responsible manner, as stated by her on Wednesday at CERAWeek by S&P Global.

In recent months, the U.S. has utilized the Strategic Petroleum Reserve twice, specifically last week and in November, and Granholm stated that a third release is still a possibility.

She invited the private sector and Wall Street to participate at this crucial moment.

"I hope your investors are urging you to increase oil and gas production to meet the current demand during this crisis," she stated.

In response to the pandemic, oil and gas companies have shifted their business models from growth at all costs to prioritizing capital discipline. They are now focusing on paying down debt, announcing share buybacks and increasing dividends, while also pledging to control supply.

The Department of Energy and the Biden administration are open to collaborating with the industry that has felt disconnected from the administration, as Granholm stated in her address.

She stated that increasing output at present does not hinder the White House's long-term objectives for clean energy, emphasizing that "we can do both" in reference to pursuing both fossil fuel and renewable energy strategies.

The White House has been accused by the oil and gas industry of hindering drilling through unfavorable policies, but officials have denied these allegations.

The oil industry is facing the same supply chain challenges that are affecting the broader economy. Occidental Petroleum CEO Vicki Hollub stated on Tuesday that finding raw materials such as sand is challenging, and the labor market remains tight. Hollub emphasized that increasing output cannot be done quickly, as the industry had anticipated supply chain bottlenecks but not a sudden demand to increase production.

On Sunday, oil prices reached their highest point since 2008, surpassing $130 per barrel. In contrast, West Texas Intermediate, the U.S. oil benchmark, was trading below zero less than two years ago.

Despite the underinvestment and Russia's invasion of Ukraine, demand for crude has recovered, but supply has been constrained, resulting in a tight market.

Granholm urged collaboration between the government and industry to promote clean energy alternatives.

"Being in the midst of history makes it challenging to witness its unfolding. In my opinion, we are on the brink of a monumental shift that humanity has ever experienced," she remarked.