All this chatter about the impact of President Biden’s decision to ban Russian oil imports in the wake of Russia’s invasion of Ukraine misses an important point.
The price of crude has zoomed skyward. It is well north of $100 per barrel. The last time we saw this kind of price hike, the result was that American oil drillers uncapped their wells and got their pumpjacks fired up to start pulling the oil out of the ground.
Do you think it could happen again now that the Russians have launched a ground war in Europe and caused the world to react as it has done by essentially boycotting Russian petroleum products?
I can see it happening.
I spent many years in West Texas, and I can speak from experience about what I have witnessed during previous oil-price spikes. We would drive through the Permian Basin, or the South Plains east of Lubbock and we would witness those pumpjacks working relentlessly to pull oil out of the flat land. We saw much the same thing as we motored through the Oklahoma Panhandle.
Oil producers need little if any government incentive to realize when it’s profitable for them to get to work.
At these prices, they are able to make a healthy profit on delivering the goods.