Trump expects Russia-Saudi oil deal soon, invites U.S. oil chiefs to White House
Updated 09:34, 02-Apr-2020

U.S. President Donald Trump expects Russia and Saudi Arabia to settle their feud over oil production soon. The spat has caused historically low oil prices. 

"We don't want to lose our great oil companies," Trump told reporters at the White House on Wednesday. "I think that Russia and Saudi Arabia are going to make a deal in the future … I think they're going to make a deal."

U.S. President Donald Trump speaks as U.S. Defense Secretary Mark Esper listens during the coronavirus daily briefing at the White House in Washington, U.S., April 1, 2020. /Reuters

U.S. President Donald Trump speaks as U.S. Defense Secretary Mark Esper listens during the coronavirus daily briefing at the White House in Washington, U.S., April 1, 2020. /Reuters

Trump also 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.

"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. "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."

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.

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.

Putin calls for action on 'challenging' energy market

Russian President Vladimir Putin called on Wednesday for global oil producers and consumers to address "challenging" oil markets.

Speaking at a government meeting, set up via a video link as a precaution against the coronavirus, Putin said that both oil producers and consumers should find a solution that would improve the "challenging" situation of global oil markets. 

He also said if investments into the oil sector fall, oil prices are sure to spike, something he said "no one needs."

"That's why we, together with the main producers and consumers, should work out such decisions, which would mitigate the situation on the market on the whole," Putin said, according to the readout of the meeting.

(With input from Reuters.)