WSJ quoted a close source as saying that US officials are looking for diplomatic solutions to persuade Saudi Arabia to reduce oil production, while also threatening to punish Russia, after US oil companies pressured the government to intervene.
Oil company leaders also asked Texas officials to help, by curbing production for the first time since the 1970s. Texas is a state famous for shale oil exploitation in the US.
`We hope the Trump administration uses negotiating tools with the Saudis and the Russians,` said Pioneer Natural Resources CEO Scott Sheffield, `I’m trying to prevent the oil and gas industry from disappearing in 18 years.`
Sheffield said he wants the US to reduce production by about 500,000 barrels per day through the end of the year.
Workers at an oil facility in Texas (USA).
Crude oil prices have recently dropped sharply due to pressure from both supply and demand.
US President Donald Trump’s administration is considering many ways to help the US oil and gas industry.
WSJ sources said the US intends to ask Saudi Arabia to return to its old production level – which is lower than the level they recently announced.
Although it is unclear when US officials will intervene, this information also shows a turning point in US fuel policy.
`Demand has never dropped as sharply as it is now, since the world entered the modern era,` said Daniel Yergin – Vice President of IHS Markit. `This industry is in a state of emergency.`
Last week, Trump ordered the US Department of Energy to buy additional oil for the Strategic Petroleum Reserve.
Industry officials and the US government believe that diplomatic measures are necessary to get Russia and Saudi Arabia to make concessions in the battle to engulf the oil market.
Trump on March 19 also said he was `a little confused` about how to deal with oil prices, as well as with Russia and Saudi Arabia.
The US has long imposed sanctions on the Russian oil industry.
However, like former President Barack Obama’s administration, Trump does not target Russia’s oil export sector, because this could quickly escalate diplomatic tensions between the two countries.
