“There's too much oil, there's a glut,” Trump said at a White House press conference on Friday, when asked what he discussed with oil industry executives earlier in the day. While lower gas prices at the pump were a good thing for Americans impacted by the economic shutdown over the pandemic, they were also hurting the US energy sector, he said.
It's a free market, they'll figure it out.
Asked about possibly imposing tariffs on imports of Russian and Saudi oil, Trump said he can “always consider” it, praising tariffs as an economic tool in general. He said he was not thinking of applying them “at the moment” but added that tariffs were a tool he could use “if they treat us unfairly.”
Shortly after Trump’s remarks, Saudi foreign minister Prince Faisal bin Farhan Al Saud said that the Kingdom would seek production cuts to achieve “market balance” that would be in the interest of US shale oil producers.
US shale operations have been hit particularly hard by the price war, which began in early March when Saudi Arabia ramped up production after Russia refused to accept additional output cuts under OPEC+ quotas.
Between that and the crash in demand due to global shutdowns over the coronavirus pandemic, the price of oil plummeted from $65 a barrel earlier this year to just $20 this week.
On Thursday, Trump phoned Saudi Crown Prince Mohammed bin Salman and reportedly told him “enough is enough,” as the price war was hurting the US shale industry – which needs a minimum price of $40 to break even. Russia is shooting for $42 a barrel, while the Saudis need at least $70 to fund all of their entitlement programs.
After just a week of the price war, Senator Kevin Cramer (R-North Dakota) begged Trump to place an embargo on Saudi and Russian oil imports, in order to save the collapsing shale oil fields in his state.
Russian President Vladimir Putin said on Friday morning that Russia is “ready for agreements” with OPEC partners as well as “cooperation with the US on this issue.” Moscow was willing to discuss a reduction in global output of “10 million barrels per day, a little less, maybe a little more.”
“Of course, all this must be done in a partnership,” Putin added.
Russian Senator Alexey Pushkov tweeted on Friday that he fully expected the US to place sanctions on both Russia and Saudi Arabia at the behest of US oil companies. “Sanctions today are the most important instrument of US foreign policy, including in the battle for world markets,” he said.