WASHINGTON (Reuters) – U.S. President Donald Trump will meet with oil company executives at the White House on Friday afternoon to discuss a historic oil-price slump threatening their businesses, brought on by the coronavirus outbreak and a Saudi-Russia price war.
FILE PHOTO: U.S. President Donald Trump addresses the daily coronavirus response briefing at the White House in Washington, U.S., April 1, 2020. REUTERS/Tom Brenner
The administration may offer ways to help the industry weather the crisis, including waiving royalty payments drillers must pay for oil produced on federal lands, imposing an import tariff on foreign crude oil or easing shipping regulations, according to sources familiar with the matter.
Trump is also likely to highlight his efforts to push Moscow and Riyadh to end their price war and tighten the taps to boost prices, the main hope for an ailing U.S. drilling industry that supported his presidential campaign.
Friday’s meeting is expected to begin around 2 p.m. ET and include representatives from Exxon Mobil Corp (XOM.N), Chevron Corp (CVX.N), Occidental Petroleum Corp (OXY.N), Continental Resources (CRL.N), the American Petroleum Institute and others, according to three sources familiar with the matter. One of the sources said Trump would host a teleconference with scores of smaller independent drillers later in the afternoon.
Trump said on Thursday that Saudi Arabia and Russia had agreed to cut output by an unprecedented 10 million to 15 million barrels per day (bpd), representing 10% to 15% of global supply, after he discussed the issue with their leaders.
The countries did not confirm the plan, but said they were willing to discuss ways to stabilize the market with other major world oil producers.
Trump said he had made no concessions to Saudi Arabia or Russia and did not agree to a U.S. production cut – an idea that would violate U.S. anti-trust law. A U.S. official told Reuters on Thursday that the slide in prices had already forced drillers to reduce production.
The United States in recent years has become the world’s biggest oil producer, which has at times put it in competition with Russia and countries in the Organization of the Petroleum Exporting Countries, even as it imposes sanctions on cartel members Venezuela and Iran.
Global oil prices have fallen by roughly two-thirds this year, raising the specter of a wave of U.S. oil drilling bankruptcies and lay-offs.
The American Petroleum Institute, which represents the U.S. oil and gas industry, had asked Trump for regulatory relief to ensure steady supplies during the coronavirus pandemic. The administration has since announced a temporary easing of environmental enforcement.
The API, many of whose members operate globally, has strongly opposed the idea of an oil import tariff, which could hurt domestic refiners and complicate projects and business relationships across borders.
Reporting by Timothy Gardner and Jeff Mason in Washington, Jessica Resnick-Ault, Stephanie Kelly, and Jarrett Renshaw in New York; Writing by Richard Valdmanis; Editing by Richard Chang and Dan Grebler