Trump threatens tariffs on crude imports to protect US oil workers
As oil prices drop, many heavily leveraged US energy companies face bankruptcies, layoffs
WASHINGTON: US President Donald Trump said he would impose tariffs on crude imports if he has to "protect" US energy workers from the oil price crash that has been exacerbated by a tussle between Russia and Saudi Arabia over market share.
"If I have to do tariffs on oil coming from outside or if I have to do something to protect our... tens of thousands of energy workers and our great companies that produce all these jobs, I'll do whatever I have to do," Mr Trump said.
Oil prices have dropped by about two-thirds this year as the pandemic crushes demand and as major producers Russia and Saudi Arabia boost output in a war over market share.
The US in recent years has become the world's biggest oil producer, at times putting its exports in competition with Russia and members of the Organisation of the Petroleum Exporting Countries (Opec).
As oil prices drop, many heavily leveraged US energy companies face bankruptcies and workers are at risk of layoffs.
After meeting industry executives on Friday, Mr Trump said he was not considering tariffs at the moment, but it was a tool that could be used "if we're not treated fairly".
Two major industry groups, the American Petroleum Institute and American Fuel & Petrochemical Manufacturers, told Mr Trump in a letter last week that tariffs on oil imports would jeopardise the domestic refining business as some plants depend on crude from abroad.
Mr Trump reiterated that Saudi Arabia had told him it had agreed with Russia to jointly reduce output by an unprecedented 10 million barrels per day or more.
The countries have not confirmed the plan, other than saying they would discuss ways to stabilise global oil markets.
Opec and Russia have postponed a meeting scheduled for today to discuss oil output cuts until Thursday, Opec sources said, due to a Saudi-Russia dispute over who is to blame for plunging crude prices.
When oil prices started dropping last month, Mr Trump initially emphasised it would be good for motorists. On Saturday he said gasoline prices could fall to US$0.90 (S$1.30) a gallon but conceded that the oil price crash is "going to hurt a lot of jobs in our country".
De facto Opec leader Saudi Arabia and Russia would be "destroying themselves" if they do not end the price war by reducing output, Mr Trump said, noting that "I couldn't care less about Opec".
Russian President Vladimir Putin, speaking last week during a video conference with government officials and the heads of major Russian oil producers, said the first reason for the fall in prices was the impact of the coronavirus on demand.
"The second reason behind the collapse of prices is the withdrawal of our partners from Saudi Arabia from the Opec+ deal, their production increase and information, which came out at the same time, about the readiness of our partners to even provide a discount for oil," Mr Putin said.
Saudi Foreign Minister Prince Faisal bin Farhan Al Saud disputed Mr Putin's claims, saying Russia had withdrawn and that statements about the kingdom's withdrawal from the Opec+ deal was devoid of truth. - REUTERS