President Donald Trump said the U.S. would meet with Saudi Arabia and Russia with the goal of staunching an historic plunge in oil prices.
Trump, speaking at the White House Tuesday, said he’s raised the issue with Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman. “They’re going to get together and we’re all going to get together and we’re going to see what we can do,” he said. “The two countries are discussing it. And I am joining at the appropriate time, if need be.”
If it happens, it would be the first meeting between Saudi Arabia and Russia since the collapse of the OPEC+ coalition in early March. Since then, both countries have vowed to flood the market with millions of excess barrels of oil in an acrimonious battle over market share. Despite the president’s remarks, neither nation has backed down from their price war, with Saudi Arabia having already loaded several supertankers with crude headed for Europe.
Trump’s intervention comes as April shapes up to be a calamitous month for the oil market. Saudi Arabia plans to boost its supply to a record 12.3 million barrels a day, up from about 9.7 million in February. At the same time, fuel consumption is poised to plummet by 15 million to 22 million barrels as coronavirus-related lockdowns halt transit in much of the world.
U.S. Energy Secretary Dan Brouillette and Russian Energy Minister Alexander Novak had a “productive discussion” by phone on Tuesday and agreed to “continue dialogue among major energy producers and consumers, including through the G20,” the Department of Energy said in a statement. The agency didn’t detail any steps the nations are considering to stem the downturn.
Oil demand has been so battered by government lockdowns to stop the spread of the coronavirus that any conceivable oil production cut agreement between the U.S., Canada, Russia and OPEC members would still fall well short of what’s needed to shore up the market, Goldman Sachs Group Inc. analysts including Damien Courvalin said in a note dated March 31.
The global benchmark crude has already plunged to record lows, completing the worst quarter in history on Tuesday. Brent for June delivery continued those declines Wednesday, falling 2% to $25.82 a barrel at 6:10 a.m. London time.
“It’s not even feasible what’s going on,” Trump said, adding that the price meltdown was harming the oil industry. “You don’t want to lose an industry — you’re going to lose an industry over it.”
Still, he celebrated the low gasoline prices brought about by the market downturn, calling them “the greatest tax cut we’ve ever given.”
“People are going to be paying 99 cents for a gallon of gasoline,” he said. “It’s incredible in a lot of ways.”