Oil & Energy
US Unlikely to Renew Russian Oil Waiver Despite Surge in Crude Prices, Wright Says
US Energy Secretary Chris Wright said Wednesday that the US is unlikely to extend a waiver on Russian oil purchases, as prices have climbed over 30% amid supply disruptions tied to the Iran conflict.Wright made the remarks during an interview at an event hosted by the Wall Street Journal.He said the earlier waiver was a temporary measure and signaled the administration does not intend to renew it after its expiration this month."That was a broad-based reprieve," Wright said, adding, "I don't think you will see that extended," referring to the prior allowance for Russian oil sales.The US introduced the waiver in mid-March, allowing the sale of Russian crude that was already stranded at sea to ease supply shortages caused by the Iran conflict. The waiver expired on Apr. 11.A separate 30-day waiver covering Iranian oil shipments at sea was also granted last month and is scheduled to expire on Apr. 19.Responding to when US gasoline prices may ease, Wright said prices are likely to decline post-conflict, adding, "I think the conflict will be resolved in the next few weeks."As to what will happen in Iran during the US-imposed blockade, Wright said Iran has limited storage capacity."They'll shut in their oil production. They'll shut in their natural gas production. They don't have a huge amount of storage capacity," he said.He added that Iranian oil, natural gas, condensates, and other petroleum products would no longer be exported from the Gulf. "No Iranian products will go out of the Gulf anymore," he said.On the Strategic Petroleum Reserve release, Wright said, "We're willing to do whatever it takes to offset this interruption in energy flows, but the 400 million barrel coordinated release around the world, that's a significant amount of oil, but we have more of a flow rate problem than a volume problem."He said it will take several months to complete the release, and that the conflict will be "long over" by then.Wright said Venezuelan oil production has risen in the past three months, with the country producing over 1.2 million barrels per day, representing about 25% growth in three and a half months and 250,000 b/d of new production."So we've already got the equivalent of what would have been all of the demand growth of the last three months out of incremental Venezuelan production. You'll continue to see more oil coming out of that as this year goes on, and of course, in the years ahead, I think we'll see huge increases in Venezuelan oil production..." Wright said.