HOUSTON, March 10 (Reuters) - A surge in energy prices
caused by the U.S.-Israel war with Iran will not lead to
additional U.S. oil output without the market predictability
needed to ensure more drilling, Andy Hendricks, CEO of oilfield
services company Patterson-UTI, said on Tuesday.
Oil prices have swung wildly since the end of February after
Iran shut the Strait of Hormuz, a key trade route, forcing major
producers in the Middle East to cut production. U.S. crude
futures hit $119 a barrel at the start of this week, the
highest level since August 2022, and moved within a $35.80 range
during Monday's trading session.
On Tuesday, they settled at $83.45 a barrel, down $11.32, as
U.S. President Donald Trump predicted de-escalation.
"The challenge is in December, when we and the oil and gas
companies we work for were all working on our budgets, oil was
in the $50s," he said in an interview, adding that it can take
more than half a year to bring wells online.
"What is the true price of oil going to be in six to nine
months?" he asked.
U.S. oil production is already near record levels, hitting
13.7 million barrels per day last month, according to the U.S.
Energy Information Administration. Permian production was at
6.59 million bpd, down from a record 6.74 million bpd hit last
year.
Hendricks said the trajectory of U.S. oil production would
depend largely on how long it takes the situation in Iran to
normalize and trade to resume through the Strait of Hormuz.
"I think the risk is that Permian oil production starts to
slow this year. If it does slow this year that will probably
cause prices to move up and then that will cause the industry to
start to pick up activity," he said.