Patterson-UTI, an oilfield services firm, says that higher oil prices won't spur more US production.

Andy Hendricks, CEO at?oilfield service company 'Patterson-UTI', stated on Tuesday that a surge in energy costs caused by the war between the United States and Israel with Iran would not lead to an increase in U.S. production of oil without the necessary market predictability.

Since the end of Feburary, oil prices have been fluctuating wildly after Iran closed the Strait of Hormuz - a major trade route - forcing major Middle East producers to reduce production. U.S. Crude Futures reached $119 per barrel at the beginning of this week. This is the highest price since August 2022. During Monday's trading, they moved in a range between $35.80 and $39.

They settled Tuesday at $83.45 per barrel, down $11.32 as U.S. president Donald Trump predicted a de-escalation.

In December, the oil price was $50, and we were working with our budgets. He said that it could take up to a half-year to bring new wells online.

What will the real price of oil be in six or nine months? He asked.

According to the U.S. Energy Information Administration, U.S. crude oil production has already reached record levels. Last month, it was 13.7 million barrels a day. Permian oil production is at 6.59m bpd. This is down from the record 6.74m bpd last year.

Hendricks stated that?the trajectory?of U.S. Oil Production would be largely dependent on how long the situation in Iran takes to normalize?and for trade to resume via the Strait of?Hormuz.

I think that the Permian Oil Production will start to slow down this year. "If it slows down this year, that will probably cause prices to rise and that will then cause the industry start to pick-up activity," he stated. (Reporting and writing by Georgina Mccartney in Houston, Liz Hampton in Denver, Bill Berkrot's editing)

(source: Reuters)