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President Trump To Meet With Oil CEOs To Discuss Saudi Oil Tariffs

US President Donald Trump will meet with U.S. oil executives to discuss possible financial assistance for the industry and tariffs on oil imports from Saudi Arabia, according to the Wall Street Journal.

Saudi Arabia is currently bent on flooding the already saturated oil markets with even more oil after the production cut talks with OPEC and Russia fell through. Saudi Arabia is now producing more than 12 million barrels per day, according to Reuters sources, even though oil demand has dropped off a cliff in recent weeks.

The meeting will take place on Friday at the White House, and will include executives from Chevron, Exxon, and Occidental Petroleum, according to the Wall Street Journal.

The U.S. Shale industry has fallen on hard times, caught between the oversupply and the drop off in demand, and the low gasoline prices are a lousy consolation prize to the Administration that has touted America’s growing energy independence.

U.S. lawmakers have expressed growing concern for the U.S. oil industry, urging the President to levy tariffs on OPEC’s oil. The Texas Railroad Commission has even thrown out the idea of its own production cuts to producers in the state.

The idea of a tariff has been proposed by Senators Roger Wicker and Jim Inhofe, who cited national security as a reason to slap tariffs on foreign oil.

The talks about the tariff come after the United States said it might join oil production talks between Russia and Saudi Arabia. According to President Trump, Saudi Arabia and Russia were discussing the issue. Trump also said that he had separate conversations with Russia’s President Vladimir Putin and Saudi Arabia’s Crown Prince Mohammed bin Salman.

WTI has been trading around $20 over the last week.

By Julianne Geiger for Oilprice.com

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  • Phil Mirzoev on April 02 2020 said:
    "President Trump To Meet With Oil CEOs To Discuss Saudi Oil Tariffs" Good luck with that! In reality it will mean that the US will tax all the US businesses and consumers, so that they will be paying, say, 50-60 USD/bbl - just by way of example - in the form of gasoline and everything else, and the rest of the world, including China - all the main economic competitors of the US - will be paying 30 USD/bbl. See how long that one will last.. Neither Saudis nor Russia will lose on that, but I can only imagine how happy China is going to be about this pearl of wisdom, even though this grace will not continue for too long..
    The problem with shale is it wasn't competitive, it isn't competitive and it won't be competitive in the foreseeable future, and the longer the US is going to keep it on a ventilator at the expense of the rest of the economy, the greater the benefits will be that the rest of the world is gonna reap from it.
  • Mamdouh Salameh on April 02 2020 said:
    The world should pause and think before swallowing Saudi Arabia's claims hook, line and sinker. Saudi Arabia has been hoodwinking the world for years about the size of its proven oil reserves and production capacity and it is doing it again now by claims about its price war and its ability to flood the global oil market with oil starting May.

    Its claim of a price war is no more than a joke. How could cutting oil prices which any oil-producer could do work when the global oil demand has reportedly lost more than 20 million barrels a day (mbd) because of the coronavirus and the glut in the market is estimated by some accounts to have risen to 1.8 billion barrels.

    As for its threat to flood the global oil market with oil, this is another joke as Saudi Arabia has never ever in its history had a production capacity of 12 mbd and will never ever achieve one either given that its current production comes from five giant but aging and fast-depleting oilfields discovered more than 70 years ago.

    Saudi Arabia exports less than 700,000 barrels a day (b/d) so imposing a tariff on its crude oil exports to the US will not be an earth-shaking measure. Moreover, it will be based on a joke as explained aforementioned.

    Still, President Trump’s administration is under pressure to keep the shale oil industry alive even on a life support machine. The idea of imposing a tax or a tariff on all foreign crude oil exports to the US is no more than an opportunistic way to fleece the oil-exporting countries and save American tax payers the cost of bailing out the shale industry. However, this won’t work as most major oil exporters could stop exporting oil to the United States to avoid the tax.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • abdullah alangari on April 01 2020 said:
    The best way for the Us to bring oil prices up to accommodate its companies and loans is to cut production way down, OPEC is tired of carrying US oil companies and others on there back so time to stop production ,and if trump wants to tax Saudi oil better stop selling to him this way no conflict heavens forbid we do not want that.
  • abdullah alangari on April 01 2020 said:
    The best way for the Us to bring oil prices up to accommodate its companies and loans is to cut production way down ,OPEC is tired of carrying US oil companies and others on there back so time to stop production and if trump wants to tax Saudi oil better stop selling to him this way no conflict heavens forbid we do not want that.

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