As the global economy gradually recovers from COVID-19 and now the Russian (a top 3 oil producer) sanctions on their oil exports, the demand for energy is ever increasing.  To fuel the recovery and get our economies back on track, we still need more energy derived from fossil fuels.  Now more than ever, demand for increased oil and gas production is critical.

This rise in our energy demands has also lead to an increase in costs.  Unfortunately, these costs are eventually passed down to the end user.  Consumers start to get grumpy when the prices of goods rise because the cost of transportation, the cost to heat their homes skyrockets, or simply to fill their tanks with gas.  All of these increases can be tied back the tight oil supply.  It boils down the simple Law of Supply and Demand:  if there is an increase in supply, the prices goes down, and the consumers are happy again.

The world needs more energy and this is exactly what energy companies are doing – even in countries where climate campaigning is a force to be reckoned with.

Some argue that the increase will only be needed for the medium term, but energy companies tend to plan ahead for long periods of time. If there is no point in making such a long-term commitment to additional production, they will probably not make it. If they have made this commitment, maybe they expect that demand for fossil fuels will remain steady for more than the next three or four years.