US, WASHINGTON (ORDO NEWS) — Undoubtedly, President Trump is haunted by the oil war between Saudi Arabia and Russia. On Tuesday, March 31, during a press conference, he announced that he had spoken with Crown Prince of Saudi Arabia Mohammed bin Salman and Russian President Vladimir Putin.
According to the American president, these two leaders are negotiating, and Trump can “personally join these negotiations at the right time if necessary.
Trump also voiced the problem that bothers him the most: low oil prices can turn into a significant tax cut for many, but this is not worth it if the price of the collapse of the American oil industry.
A price war on the oil market – Russia and Saudi Arabia are trying to extract as much oil as possible in order to see whose national economy is able to cope with a sharp decrease in budget revenues – began after Riyadh and Moscow could not agree on an additional reduction in volumes mining at the meeting on March 6th.
Those reductions would probably not lead to an increase in the already rather low oil price, but they would hardly have a significant impact on oil revenues. If we do not go deep into economic theory, we can say that the absence of at least an elementary framework in the field of trade of such an important resource as oil can lead to huge price fluctuations – to the detriment of consumers and producers at the same time.
President Trump understands this. In a March 30 interview with Fox News , Trump said the oil war was a fight between Saudi Arabia and Russia: “And they both went crazy, both went crazy.” Its wording can hardly be called diplomatic, and it is quite possible that Moscow and Riyadh will not like them, but they accurately convey the point of view of many energy analysts regarding the origins of the current crisis.
Even more surprisingly, the Trump administration is inclined to blame Saudi Arabia rather than Russia for the current crisis. After a telephone conversation between US Secretary of State Mike Pompeo and Crown Prince Mohammed on March 24, the American side made a statement saying the following: “The Secretary of State emphasized that, being the leader of the G20 and the leader in energy production, Saudi Arabia has a real opportunity to fulfill our mission and calm the global energy and financial markets now that the world is facing serious economic uncertainty. ” After such a veiled reproach, the final proposal for our “partnership in the face of Iran’s destabilizing behavior in the region” went unnoticed.
This does not mean at all that some representatives of the White House would not want to side with Saudi Arabia in this dispute. On March 31, Reuters reported that it was currently considering a proposal to create “an alliance between the United States and Saudi Arabia to manage the global oil market.”
According to one source, the idea of such an alternative to OPEC “is being considered, but so far there has been no serious discussion about this.” According to other sources, Pompeo discussed the idea with Energy Secretary Dan Brouillette and new National Security Advisor Robert O’Brien.
It is likely, according to Reuters, that the US Congress will oppose this idea, but it can be used to force Riyadh to reduce production.
One can only guess how the oil war will unfold and when it will end. The situation is developing very quickly. Despite Trump’s statement that Russia and Saudi Arabia are having discussions, on Wednesday, April 1, the Kremlin said that the two countries were not negotiating at the moment and that President Putin did not plan to conduct telephone conversations with the Saudi authorities.
Moreover, Russia has just sent a plane with medical equipment to the United States to combat the spread of coronavirus infection. Many were skeptical of this help, calling it a propaganda move.
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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.