By Ari Natter and Stephen Cunningham
- US Oil prices jumped as much as 24% Thursday, the most ever, after President Donald Trump said that he’d get involved in the global price war at an appropriate time.
- US West Texas Intermediate Crude gained 24% to $25.28 per barrel, while Brent crude gained nearly 14% to $28.26 per barrel.
- “We are trying to find some kind of middle ground,” Trump said during a press conference at the White House.
- The US Department of Energy also said Thursday that it would buy 30 million barrels of American oil for delivery in May and June, following Trump’s directive to purchase oil for the Strategic Petroleum Reserve.
Crude prices rebounded from an 18-year low as Trump made the comments and signs of stress from oil’s collapse emerged in the Middle East.
“We have a lot of power over the situation, and we’re trying to find some kind of a medium ground,” Trump said.
The U.S. shale industry has found itself caught in the middle of a fight over market share between Saudi Arabia and Russia. Talks between the two countries about cutting back production as the coronavirus outbreak saps global demand fell apart earlier this month, triggering an all-out price war that has sent oil futures plunging.
“It’s very devastating to Russia, because the whole economy is based on that, and they have the lowest prices in decades,” Trump said.
“I would say it’s very bad for Saudi Arabia,” he said. “But they’re in a fight, they’re in a fight on price, they’re in a fight on output. At the appropriate time I’ll get involved.”
Trump is facing growing calls from lawmakers to help the domestic oil industry — which is scaling back operations and is threatened with a wave of bankruptcies — as his officials adopt a tougher rhetoric against those they see as responsible.
Energy Secretary Dan Brouillette characterized the price war as an “intentional disruption to world oil markets by foreign actors,” in a statement Thursday where he outlined plans to buy as many as 77 million barrels to fill up the nation’s emergency stockpile.
The administration’s plan to aid struggling American shale drillers involves buying as much as $3 billion worth of oil, starting with domestic producers who employ 5,000 people or less.
Trump supporter and shale billionaire Harold Hamm, who said last week he would file a complaint against Saudi Arabia for “illegal” dumping of crude, said Thursday that Senator James Inhofe has asked the Department of Commerce to begin a probe under Section 232 of the Trade Expansion Act.
And North Dakota Senator Kevin Cramer went as far as to call on Trump to ban crude imports from Russia, Saudi Arabia and other OPEC members in response to their recent action to “distort energy markets” when demand is already weak.
Oil industry leaders have urged the Trump administration to find a diplomatic solution. The American Exploration and Production Council said in a March 12 letter that it needs Trump’s help in ensuring “restoration of a functioning, stable, global market for oil.” And the head of the American Petroleum Institute, Mike Sommers, also has encouraged the president to engage with Saudi Arabia and Russia to ensure markets aren’t oversupplied.