WASHINGTON — President Donald Trump said Thursday he may intervene in an oil price war between Russia and Saudi Arabia that has U.S. oil drillers reeling, but that for now low prices are like a tax cut for American consumers.
Speaking at a coronavirus briefing in Washington, Trump said would take action in the dispute that has resulted in the worst market rout in nearly 30 years at the “appropriate time.”
“We have a lot of power over the situation and we’re trying to find some kind of a medium ground,” Trump added.
The U.S. shale industry has found itself caught in the middle of a war over market share between Saudi Arabia and Russia. Talks between the two countries of cutting back production as the coronavirus outbreak saps worldwide crude demand fell apart earlier this month, triggering an all-out price war that has sent oil futures plunging to the lowest in 18 years.
“It’s very devastating to Russia, because the whole economy is based on that, and they have the lowest prices in decades,” Trump said.
“I would say it’s very bad for Saudi Arabia,” he said. “But they’re in a fight, they’re in a fight on price, they’re in a fight on output. At the appropriate time I’ll get involved.”
Oil industry leaders have urged the Trump administration to find a diplomatic solution. The American Exploration and Production Council said in a March 12 letter that it needs Trump’s help in ensuring “restoration of a functioning, stable, global market for oil.” And the head of the American Petroleum Institute, Mike Sommers, also has encouraged the president to engage with Saudi Arabia and Russia to ensure markets aren’t oversupplied.
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*Ari Natter – Bloomberg