US President Donald Trump said Tuesday he was ready to help resolve an escalating oil price war between Russia and Saudi Arabia that has helped push crude benchmarks to 17-year lows.
The threat of a global recession triggered by the coronavirus pandemic had already hammered prices when Riyadh said last month it would raise exports after a production-cut agreement among top producers flopped in early March.
On Monday, Saudi Arabia said it would increase exports further to a record 10.6 million barrels per day from May, deepening a global supply glut as crude recorded its biggest monthly and quarterly price plunges in history.
Trump said he had spoken with his Russian counterpart Vladimir Putin and Saudi Crown Prince Mohammed Bin Salman by phone with the aim of halting the slide.
“The two countries are discussing it. And I am joining at the appropriate time, if need be,” Trump said.
Saudi Arabia had been exporting around 7.0 million barrels per day under an output reduction agreement among a 24-member producer alliance known as OPEC+, which included Russia.
OPEC+ failed to reach an agreement on further production cuts to shore up sagging prices as the coronavirus battered the global economy last month.
Analysts say Riyadh is engaged in a deliberate long-term strategy to capture greater market share by pressuring its high-cost rivals.
“Saudi policy will not just drive more expensive forms of oil production out of the market; it will also make it harder for renewable energy to compete with fossil fuels,” said Bernard Haykel, a Saudi expert at Princeton University.
The price war has also hit shale oil producers in the US, with Trump telling Tuesday’s press conference that the production dispute threatened “thousands and thousands” of jobs.
In a letter last week to US Secretary of State Mike Pompeo, a group of US senators accused Saudi Arabia and Russia of waging “economic warfare against the United States.”