When President Joe Biden first asked OPEC to increase production earlier this year, it drew an angry reaction from Texas Gov. Greg Abbott, who told Biden to “back off” and to let American companies deal with the supply problem that was pushing fuel prices up. . The delicate relationship between the current administration in Washington and the oil industry, which tends to lean politically to the right, has been repeatedly highlighted in the media, along with Biden’s anti-oil measures such as the assassination of the Keystone XL pipeline project and the moratorium on oil and gas drilling on federal lands.

Yet political incompatibility alone cannot prevent profit from rising prices, so it is hardly the only – or even an important reason – for the restriction of the production of the US oil industry in a context of soaring prices of crude and products. In fact, there are at least two other important reasons for this restraint.

The first is that shale drillers in particular are currently reaping much greater profits at current production levels. According to Deloitte calculations cited by Bloomberg’s Kevin Crowley, U.S. shale operators are currently making the biggest profits since the start of the shale revolution. And that means something. The reason the development of the Shale Game got the name Revolution is that it happened so quickly, and it happened so quickly because it was profitable, for a while.

By making higher profits, shale drillers – at least the public among them – can keep their shareholders happier than they have been for years during the silver-burning phase of the revolution. shale when everyone rushed to increase production by the most, contributing to the last two price drops.

Related: IEA Brings Brent Oil Price Outlook 2022 to $ 79 Speaking of accidents, OPEC is the other reason shale drillers practice withholding. The cartel has already shown twice that it has the power to cause a price collapse that could hurt its members, but appears to hurt American shale producers more. After several waves of bankruptcies, shale drillers appear to have taken a different approach to production, betting on larger profits instead of higher production.

Either way, production in the US shale patch is on the rise. Reuters reported earlier this week that production in the Permian is on the verge of setting a record, exceeding production levels before the pandemic next month. That’s because the Permian has been the darling of the shale industry for years, posting some of the lowest production costs in some areas, attracting more capital than other shale areas.

Global production is also on the rise. According to the latest weekly industry update from the Energy Information Administration, the United States produced 11.5 million bpd of crude, ranking it number one in the world and representing an increase of 1 million. b / d over the year. It is lower than the record 13 million dbo production rate just before the pandemic, but by no means small potatoes.

And, perhaps surprisingly to some, the industry is not shy about working with the federal government to make gasoline more affordable. The messages from shale oil are not all the same tone, but they tend to be encouraging.

Related: Energy Crisis Adds Billions To Oil Tycoon Net Worth

The CEO of Occidental Petroleum, for example, was quite blunt in telling Biden to “pull out” the US oil industry rather than call on OPEC to increase oil production so that US drivers can pay less. at the pump. President Scott Sheffield said earlier this month that Biden must “withdraw his rhetoric on federal leases going forward.”

Occidental’s Vicki Hollub was more touchy this week, when she said, in response to a question about whether Biden was wrong in calling on OPEC to increase production, “if I had to pass a call wouldn’t be long distance, it would be a local call. “

“I think first you stay home, you ask your friends and neighbors to do it. And then if we can’t do it, you call other countries,” Hollub told CNBC.

By Irina Slav for Oil Octobers

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