MCCAIG/iStock via Getty Images

MCCAIG/iStock via Getty Images

Oil prices are so high that "we are encroaching upon the area of demand destruction," ConocoPhillips (NYSE:COP) CEO Ryan Lance told Bloomberg in an interview at the CERAWeek by S&P Global energy conference in Houston.

Crude oil futures racked up their highest settlements since 2008 on Tuesday, with April WTI (CL1:COM) closing +3.6% at $123.70/bbl and May Brent (CO1:COM) ending +3.9% at $127.98/bbl, while U.S. retail gasoline prices continued to climb, as the national average price hit $4.173/gal early Tuesday, topping the previous record of $4.114/gal from July 2008.

"This the level where consumers start to push back. People start conserving energy and changing their behavior," Lance said.

The new U.S. ban on importing Russian oil, gas and products "makes sense," at least for now, Lance told the CERAWeek by S&P Global conference, but if the war in Ukraine drags on for many months, a different plan would be needed to ensure sufficient oil supplies at affordable prices.

In an interview with CNBC, Lance said it would take 8-12 months to see "the first drop of new oil" if the company decided to pump more oil, which is "why we have to be thinking about the medium and longer term."

ConocoPhillips expects to spend 20% more capital this year than in 2021 and will increase production, and could decide to put even more capital to work, the CEO said, but the company "needs to make sure the returns are there."

"We're dealing with the same inflation and supply chain every other manufacturer is dealing with in the U.S.," Lance said, echoing comments made by Occidental Petroleum CEO Vicki Hollub.