Biden's Paradox: Rising US Oil Production Amidst Accusations of a 'War on Oil'

• Financial

It's a contentious time for the oil industry in America. While critics point fingers at President Joe Biden for supposedly waging a war on the oil sector, recent data presents a contrasting story: US oil production is not only alive but thriving.

Shattering Records: The Resilience of US Oil Production

Against the prevalent narrative, the United States is on the brink of breaking its oil production records set during the Trump era. Federal estimates released this Tuesday revealed an anticipated rise in US oil output to an average of 12.8 million barrels per day for the first time in history.

Hunter Kornfeind, an oil market analyst at Rapidan Energy Group, addressed the misconceptions surrounding the industry. “There’s a narrative out there that US production is dead or dying,” he commented.

Contrary to such beliefs, while the industry's growth rate might have decelerated, it remains robust. In Kornfeind's words, the sector is "maturing, it’s not dead”. One key driver behind this resurgence is the revival of oil prices, which had been dampened due to recession concerns.

Additionally, improvements in drilling efficiency have further bolstered the industry.

A Historical Perspective: The Entrepreneurial Spirit of Oil

When former Vice President Pence and President Trump vacated their offices, oil prices were grappling with the repercussions of the Covid-19 pandemic.

Yet, US oil output has witnessed an uptrend since. Drawing parallels, domestic oil production had also experienced a surge under President Barack Obama. This was a period when the US shale revolution burgeoned, extracting considerable amounts of oil and natural gas, especially in Texas.

Matt Smith, Kpler’s lead oil analyst of the Americas, offers a fresh perspective on this issue. He believes the industry's progress might be less influenced by the administration in power and more attributed to the oil sector's entrepreneurial spirit.

However, there are still concerns. The American Petroleum Institute (API), a vocal critic of the Biden administration's regulatory approach, highlighted that federal permits and new federal acres leased have declined under the current leadership.

In a statement to CNN, an API spokesperson clarified, “American oil and natural gas production is growing to meet rising demand, but that supply growth is largely from existing US projects approved in the 2010s”.

They stressed the need for supportive policies to further bolster the industry. In the midst of debates and data, one thing remains clear: the American oil industry is not merely surviving but evolving and adapting to a complex global landscape.