As first covered by the Wall Street Journal (WSJ), the US President, Donald Trump met with American oil executives in the White House to discuss the situation of energy issues during the coronavirus outbreak amid the possibility of arriving a deal between the two leading oil exporters, Saudi Arabia and Russia.
The global oil industry has been severely hit by the virus epidemic since governments across the globe have imposed restrictions on movements and travels of their people. As a result, the oil price has been rapidly declining due to slumping energy demand globally.
Trump’s Oil Concerns
Besides meeting with the companies’ executives, Trump was also reported having a chat recently with the leaders of both Russia and Saudi Arabia. Following the conference with the leaders, he shared the view that the two major oil-producing countries would make a deal to end price issues within a “few days,” which means cutting output and lifted up prices.
Trump told reporters at a media conference, “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.” Citing the deteriorating situation in the global oil industry, Trump stated, “Worldwide, the oil industry has been ravaged… It’s very bad for Russia, it’s very bad for Saudi Arabia. I mean, it’s very bad for both. I think they’re going to make a deal.”
The key concern for Trump was that global oil prices have dropped by nearly two-thirds this year due to the impact of the coronavirus outbreak while, at the same time, major producers including Saudi Arabia and Russia have disputes over oil production.
A senior Gulf source told Reuters on Thursday that the Saudi Kingdom would support the cooperation between oil producers to stabilize global oil prices but Russia’s opposition to the Saudi-led move for cutting oil output last month has caused the crisis.
Demands of US Oil Companies
According to the WSJ, Trump would further hold meetings with American oil executives to discuss the options including the possibility of tariffs on oil imports from Saudi Arabia to help its industry. The news media, WSJ reported that many major drillers including Exxon Mobil Corp., Chevron Corp., Occidental Petroleum Corp., and Continental Resources are expected to participate in the initial meeting on Friday.
With the severe impact on the US oil companies, some of them were at the edge of declaring bankruptcies and pursuing massive layoffs to sustain their operations. A source told Reuters that oil refiners and small producers were also expecting the new policy, which allowed potential waivers for royalties on existing federal offshore and onshore leases.
The American Petroleum Institute (API), which represents the US oil and gas industry, said that the present president of the company, Mike Sommers would attend the initial meeting called by the White House. However, he claimed, “We are not seeking any government subsidies or industry-specific intervention to address the recent market downturn at this time.”
Meanwhile, in the last week, a group of companies urged the Trump administration to ensure relief from some regulatory requirements to ensure steady supplies during the coronavirus. The administration has since announced that it would temporarily ease some environmental enforcement to help the industry.
I’m Roshan, a journalist, blogger and music lover. I like covering global news related to finance, business, and technology. Focusing on the collection of true and reliable information, I rely on working by conducting interviews with business leaders and talking to the inside sources of companies.
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