‘We need to increase oil & gas output immediately,’ Elon Musk says as Ukraine crisis jolts U.S. crude to 2008 high

“Hate to say it, but we need to increase oil & gas output immediately,” Musk tweeted Friday. “Extraordinary times demand extraordinary measures,” he said.

Musk’s remarks comes as U.S. benchmark crude oil on the New York Mercantile Exchange settled at the highest values since 2008, posting the biggest weekly dollar gain on record, according to Dow Jones Market Data.

April West Texas Intermediate crude futures CLJ22, +6.81% CL.1, +6.81% increased 7.4%, to settle at $115.68 a barrel, the highest finish since September 2008. For the week, prices based on the front-month contract rose $24.09, or 26.3%, the sharpest dollar gain found in data going back to April 1983.

Higher crude prices also eventually translate to higher gasoline prices for average Americans.

On top of that, April natural gas NG00, +4.14%  rose 6.2% to $5.016 per million British thermal units, and booked a 12.2% weekly gain.

The surge in commodities such as crude and natural gas comes after Russia’s invasion of Ukraine that began on Feb. 24. Russia is a major producer of crude and natural gas, and sanctions levied on the Kremlin in response to its unprovoked attack on Kyiv have rippled through global markets.

In theory, the run-up in oil prices would be likely to help EV maker Tesla in the longer run, as the cost of gasoline rises would potentially encourage consumers to switch to electric vehicles. But the Russian invasion has drawn widespread criticism from the international community, with many enacting a de facto embargo of Russian crude.

Tesla shares closed down 0.1% Friday, but it was one of the few companies to end sharply higher on the week, up 3.5%, even as the Dow Jones Industrial Average DJIA, -0.53%, the Nasdaq Composite Index COMP, -1.66% and the S&P 500 index SPX, -0.79% closed lower for the week.

Earlier this week, the U.S. and more than two dozen major oil-consuming nations said they would release 60 million barrels of crude from emergency stockpiles to quell the surge in crude prices caused by the Ukraine crisis.

However, the drawdown is considered a drop in the bucket, given that global oil demand is estimated at 100 million barrels a day and Russia’s oil production was at about 10.04 million barrels a day in January of 2022.

Concerns about the high price of crude also come amid persistent concerns about out-of-control inflation that was already dogging global economies in the aftermath of the COVID pandemic, amid supply-chain bottlenecks and labor shortages.

Some congressional GOP lawmakers have been suggesting that drilling more traditional energy sources, such as oil and natural gas, on U.S. land and water is the key to energy independence and geopolitical security, especially while the Russian crisis continues.

In a letter to President Biden sent Wednesday, every Republican member of the Senate Committee on Energy and Natural Resources, led by ranking member Sen. John Barrasso of Wyoming, urged the administration to rethink U.S. energy policy.