The federal government should take steps against Saudi Arabia and Russia’s dumping of oil on the American market during the Covid-19 crisis, the chairman of the Texas Railroad Commission has said, after a cross-state government agency passed his resolution that called on Washington to investigate the allegations for oil dumping.
“Flooding the market during ongoing negotiations with President Trump and the international community is disingenuous,” Wayne Christian said, as quoted by World Oil. “More than 100,000 oil and natural gas jobs in the United States have been lost according to Rystad Energy Group. Our federal government must push back against international efforts that harm American energy dominance.”
In March and April, Saudi Arabia sent much higher than usual amounts of oil to the United States, with the March average at 516,000 bpd—a 12-month high—and some 14 million bpd shipped to the U.S. during the first week of April alone. Later in April, the Wall Street Journal reported the amount of Saudi crude en route to the United States was seven times the normal intake of Saudi oil by the U.S. in 2019.
The surge in Saudi oil exports—not just to the U.S.—coincided with a colossal demand loss around the world due to the coronavirus pandemic, and some analysts see global oil demand in April crashing by 30 percent, or by 30 million bpd, compared to the world’s typical levels of consumption.
These developments led President Donald Trump to threaten a ban on Saudi oil imports, which would have forced the Kingdom to reroute as much as 40 million barrels of crude.
"After the COVID-19 pandemic crippled the U.S. oil and gas industry, Saudi Arabia shipped 1.3 million barrels a day to our nation, roughly four times February's daily volume and the highest figure since 2014." Wayne Christian said. He did not comment on the inclusion of Russia in the list of oil dumpers.
Russia exported record amount of fuel oil to the United States during the first half of the year, according to a Reuters report, as the U.S. sought to replace Venezuelan oil.
By Irina Slav for Oilprice.com
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The volumes of fuel oil Russia exported to the United States during the first half of the year were imported by the Americans to replace Venezuelan fuel oil that can’t be imported because of US sanctions.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London