U.S. President Donald Trump said he has invited U.S. oil executives to the White House to discuss ways to help the industry “ravaged” by slumping energy demand during the coronavirus outbreak and a price war between Saudi Arabia and Russia.
Trump also said he had talked recently with the leaders of both Russia and Saudi Arabia and believed the two countries would make a deal to end their price war within a “few days” – lowering production and bringing prices back up.
“I’m going to meet with the oil producers on Friday. I’m going to meet with independent oil producers also on Friday or Saturday. Maybe Sunday. We’re going to have a lot of meetings on it,” Trump told reporters at a media conference.
“Worldwide, the oil industry has been ravaged,” he said. “Its very bad for Russia, its very bad for Saudi Arabia. I mean, its very bad for both. I think they’re going to make a deal.”
Global oil prices have fallen by roughly two-thirds this year as the coronavirus has slammed global economies at the same time major producers Saudi Arabia and Russia have started to flood the market with oil.
Speaking to Reuters on Thursday, a senior Gulf source familiar with Saudi thinking said the Kingdom supports cooperation between oil producers to stabilize prices but Russia’s opposition to a proposal last month to deepen supply cuts has caused market turmoil.
The collapse in prices has threatened the once-booming U.S. drilling industry with bankruptcies and massive layoffs, and Washington has scrambled for ways to protect the sector.
In the coming meetings with oil executives, Trump is expected to discuss a range of options to help the industry, including the possibility of tariffs on oil imports from Saudi Arabia, according to the Wall Street Journal, which was first to report the planned meetings.
Major drillers expected to participate in the initial meeting on Friday include Exxon Mobil Corp, Chevron Corp, Occidental Petroleum Corp, and Continental Resources, according to the Journal.
Occidental said it had no comment, while officials at the other companies did not respond to requests for comment.
A source familiar with the plan told Reuters that oil refiners and small producers would also be represented and the issue of potential waivers for royalties on existing federal offshore and onshore leases would be discussed.
The American Petroleum Institute, which represents the U.S. oil and gas industry, said its president Mike Sommers would attend the initial meeting, but added: “We are not seeking any government subsidies or industry-specific intervention to address the recent market downturn at this time.”
The API, many of whose members operate globally, has said in the past it opposes trade tariffs because it can complicate projects and business relationships in other countries.
The group on March 20, however, sent a letter to the Trump administration requesting relief from some regulatory requirements to ensure steady supplies during the coronavirus. The administration has since announced it will temporarily ease some environmental enforcement.
Trump this week called Russia and Saudi Arabia’s price war “crazy” and spoke with Russian President Vladimir Putin about the issue. Top energy officials from the two countries later spoke and agreed to continue discussions alongside other major global oil producers and consumers, according to the Kremlin.
The Trump administration said it is also planning to send a special envoy to Riyadh to push for lower output.
Saudi Arabia’s crude supply rose on Wednesday to a record of more than 12 million barrels per day, two industry sources said, despite a plunge in demand triggered by the coronavirus outbreak and U.S. pressure on the kingdom to stop flooding the market.
(Reporting by Doina Chiacu, Jeff Mason, Timothy Gardner and Valerie Volcovici in Washington and Gary McWilliams in Houston, and Rania el Gamal in Dubai; Editing by Tom Brown, David Gregorio, Lincoln Feast & Simon Cameron-Moore)