US, WASHINGTON (ORDO NEWS) — The US and Saudi Arabia are discussing the idea of concluding an oil agreement, Bloomberg notes. Such an agreement would actually help create a cartel – a group of independent market participants who decide to act together to influence the market in a way that benefits them.
However, at the moment this is nothing more than an idea that some officials in the Trump administration support. It is still difficult to say that this will grow into something more.
“There are many ideas floating around in the political space, and this is one of them,” said US Secretary of Energy Dan Brule.
The US oil industry has been hit hard by the outbreak of coronavirus and the price war that Saudi Arabia began when Russia refused to carry out deeper cuts. Producers reduce spending plans, suspend the repurchase of shares, and ask oilfield service providers for discounts on their services.
WTI has lost 60% of its value since the beginning of the year.
According to John Kemp of Reuters , it will fall even more if there is no sharp improvement in the economic prospects of the country and the world. This prospect cannot please either the shale oil industry or large companies in the USA, which makes the administration’s steps in relation to Saudi Arabia logical. But so far nothing is clear.
“As part of the public policy process, our interdepartmental partners get together and discuss a number of different issues. But so far we have not made any decision on this issue. We will take part in diplomatic efforts in the future,” Brule said.
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