Why Elon Musk wants oil production to increase now, even if it's bad for Tesla
Tesla CEO Elon Musk has urged for immediate increase in oil and gas production around the world amid the ongoing Russia-Ukraine war. Taking to social media, Musk said sustainable solutions cannot replace Russian output. The CEO of world's largest electric vehicle manufacturer said an increase in oil production is necessary, even if it’s bad for Tesla.
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“Hate to say it, but we need to increase oil & gas output immediately. Extraordinary times demand extraordinary measures," Musk wrote on Twitter on Saturday. “Obviously, this would negatively affect Tesla, but sustainable energy solutions simply cannot react instantaneously to make up for Russian oil & gas exports," he added.
According to Elon Musk, adoption of electric vehicles and a wider shift to renewable energy may not happen fast enough to shield consumers from higher prices in the short-term. Currently, Russia’s invasion of Ukraine has choked fuel supplies and driven up gas prices. Oil prices have pushed above $114 a barrel as buyers continued to shun Russian crude after its invasion of Ukraine.
According to energy analysts, soaring oil prices will drive more drilling of oil and gas around the globe, as fossil fuel companies rush to cash in, sowing the seeds for the boom to turn to bust. That will make oil abundant and affordable again.
Musk's tweets come at a time when the Joe Biden administration is considering options to put a ban on US imports of Russian crude oil. US Senators Joe Manchin proposed a bill that would prohibit the import of Russian crude oil, petroleum, petroleum products, liquefied natural gas (LNG) and coal. Oil industry leaders in the US are also calling for support to boost production.
Oil capped its biggest weekly gain on record Friday, while commodities from crops and metals to gas have also surged on the impact of Russia’s invasion of Ukraine.
