Clifford Krauss:
Certainly, they’re making a lot of money, and there’s a war going on. And so that’s not a pretty picture, and you don’t see oil company executives crowing about it.
The frustration on the part of the American administration is, why aren’t these companies producing more oil, the thinking being, they’re not producing more oil because they want to keep the prices high. If only they would produce more, which is what they did years ago when prices went up, they would bring the price down.
That is not what the investment community wants. The investment community wants exactly what the oil companies are doing. And that is returning the cash to their shareholders in the form of dividends and stock buybacks.
The oil executives say, look, if we produce more, we are going to bring the price down in a year or two. And the oil that we are going to — the oil and the gas that we’re going to get out of the ground is going to be worth less, and we’re paying more now to get it out of the ground. So we’re going to lose money.
And this is exactly what happened several years in the last few years. So the oil companies are saying, we are not going to make that mistake again.
Now, of course, the oil companies are thinking about their bottom line. The president is thinking about national security. How you square that circle is tough.
