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Business News/ Companies / News/  Elon Musk calls for 'immediate' boost in oil, gas production to replace Russian output
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Elon Musk calls for 'immediate' boost in oil, gas production to replace Russian output

Tesla Founder Elon Musk called for an immediate increase in oil and gas production around the world because sustainable solutions cannot replace Russian output

Tesla Founder Elon Musk called for an immediate increase in oil and gas production around the world. (REUTERS)Premium
Tesla Founder Elon Musk called for an immediate increase in oil and gas production around the world. (REUTERS)

Just as oil surged on Friday, ending the week at multi-year highs amid Russian invasion of Ukraine intensifying and with oil buyers shunning barrels from the world's second-largest exporter of crude, Tesla Founder Elon Musk called for an immediate increase in oil and gas production around the world because sustainable solutions cannot replace Russian output.

Musk took to Twitter to share that although increasing oil and gas production would affect Tesla negatively, sustainable energy solutions cannot react instantaneously to make up for Russian oil and gas exports. He wrote, "hate to say it, but we need to increase oil & gas output immediately." Further adding, "extraordinary times demand extraordinary measures."

Meanwhile, oil surged on Friday, ending the week at multi-year highs as Russia's invasion of Ukraine intensified and oil buyers shunned barrels from the world's second-largest exporter of crude. Crude prices posted their largest weekly gains since the middle of 2020, with the Brent benchmark up 21% and U.S. crude gaining 26%. The most commonly traded oil futures closed at levels not seen since 2013 and 2008, respectively.

Oil surged throughout the week as the United States and allies heaped sanctions on Russia that, while not aimed at Russian oil and gas sales, nonetheless squeezed its industry, and threatens a growing supply crunch in coming months. Brent futures rose $7.65, or 6.9%, to settle at $118.11 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $8.01, or 7.4%, to end at $115.68.

That was the highest close for Brent since February 2013 and for WTI since September 2008. During the week, Brent rose to its highest intraday since May 2012 and WTI its highest since September 2008.

Russia exports 4 million to 5 million barrels of oil daily, making it the second-largest crude exporter in the world after Saudi Arabia. Traders were barely able to sell Russian oil all week, with Shell PLC on Friday the only notable buyer of a Russian cargo, which was sold at a steep $28-discount to physical Brent crude.

The tumult is likely to continue. The Biden administration, under pressure from lawmakers from both major parties, said it is considering options for cutting U.S. imports of Russian oil even as it tries to minimize the impact on global supplies and on consumers.

"While U.S. oil imports from Russia are small in a global context," UBS analyst Giovanni Staunovo said crude prices rallied late in the day because "some market participants might be concerned that other countries might follow that step."

Britain will look to target Russia's energy sector in future rounds of sanctions, its foreign minister said Friday. The government has resisted this move so far, due to concerns that it will push up energy bills.

(With inputs from agencies)

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Published: 05 Mar 2022, 07:41 AM IST
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