Saturday, President Trump said he would impose tariffs on crude imports if he has to “protect” US energy workers from the Crude Oil price dive that has been exacerbated by a war between Russia and Saudi Arabia over market share.
“If I have to do tariffs on oil coming from outside or if I have to do something to protect our … tens of thousands of energy workers and our great companies that produce all these jobs, I’ll do whatever I have to do,” President Trump told reporters in a briefing about the coronavirus outbreak.
Crude Oil prices have dropped by about 67% this year as the virus pandemic crushes demand and as major producers Russia and Saudi Arabia boost output in a war over market share.
The US in recent years has become the world’s biggest oil producer, at times putting its exports in competition with Russia and members of the Organization of the Petroleum Exporting Countries, or OPEC.
As prices decline, many heavily leveraged US energy companies face bankruptcies and workers are at risk of layoffs. After meeting with industry executives Friday, President Trump said he was not considering tariffs at the moment, but it was a tool that could be used “if we’re not treated fairly.”
2 major industry groups, the American Petroleum Institute and American Fuel & Petrochemical Manufacturers, wrote President Trump in a letter Wednesday telling him that tariffs on imports would jeopardize the domestic refining business as some plants depend on Crude Oil from abroad.
The United States imported more 1-M BPD of Crude Oil from Russia and Saudi Arabia combined in Y 2019, according to the US Energy Information Administration.
President Trump reiterated Saturday that Saudi Arabia had told him it had agreed with Russia to jointly reduce output by an unprecedented 10-M BPD or more. The countries have not confirmed the plan, other than saying they would discuss ways to stabilize global markets.
OPEC and Russia have postponed a Monday meeting to discuss oil output cuts until 9 April, OPEC sources said, due to a Saudi-Russia dispute over who is to blame for plunging crude prices.
When oil prices started dropping last month, Trump initially emphasized it would be good for motorists. On Saturday he said gasoline prices could fall to 0.90/gal and conceded that the oil price crash is “going to hurt a lot of jobs in our country.“
De facto OPEC leader Saudi Arabia and Russia would be “destroying themselves” if they do not end the price war by reducing output, President Trump said, noting that “I couldn’t care less about OPEC.”
Have a healthy weekend, stay home!