President Donald Trump gave the strongest signal yet the U.S. might not join Saudi Arabia, Russia and other major producers in coordinated oil-production cuts, even as plunging crude prices put thousands of American shale jobs at risk.
While OPEC and its allies prepare for a meeting on Thursday to forge an unprecedented output-cut deal, Trump told reporters in Washington that the free market would work to curb American production.
“I think the cuts are automatic if you are a believer in markets,” he said, echoing comments he made last week after a meeting with several oil industry titans ended without a public plan for addressing the oil market’s historic crash. Though the president has touted global output cuts of 10 million to 15 million barrels a day to stabilize prices, he’s been reticent to commit the U.S. to such an effort, suggesting instead that Saudi Arabia and Russia should bear the brunt.
On Monday, Trump added that the U.S. hasn’t been asked to participate in a global deal. “Nobody’s asked me,” he said. “If they ask me I’ll make a decision,” he told reporters.
The market rout -- which was triggered by coronavirus-related lockdowns and exacerbated by the Saudi-Russian price war -- has already spurred shale explorers to scale back their budgets, put hundreds of thousands of jobs at risk and and has already led some companies to bankruptcy. As storage fills up with barrels nowhere to go, producers are being forced to shut in wells.
Asked whether the U.S. would join other major producers in curbing production, Trump said the cuts were “happening automatically.”
“It’s supply and demand,” he said. “They are cutting back very seriously.”
© Copyright 2023 Bloomberg News. All rights reserved.