As the OPEC+ deal is pending, US senators from oil states held phone talks with Saudi officials to ensure that Riyadh finally puts an end to the problem “it helped to create” – the ‘oil price war’ that tanked the market.
The two-hour phone call, led by Republican Senators Kevin Cramer and Dan Sullivan, came on Saturday, two days after OPEC+, led by Saudi Arabia and Russia, agreed to cuts that would take 10 million barrels per day offline. The massive deal is meant to stop crude prices from tumbling and boost the oil market.
While stabilization efforts are seemingly appreciated in the US, whose shale companies were hit hard by the market turmoil, the officials did not pass up the chance to blame the Kingdom for the troubles of American producers.
“While we appreciate them taking the first step toward fixing the problem they helped create, the Saudis spent over a month waging war on American oil producers, all while our troops protected theirs,” Senator Cramer of North Dakota said.
Cramer and fellow Republican Sullivan of Alaska introduced legislation at the end of March stipulating the removal of all US forces and equipment from Saudi Arabia. The move was aimed at pushing the Kingdom to stop the oil dispute when no new cuts were in sight.
That’s not how friends treat friends. Their actions were inexcusable and won’t be forgotten. Saudi Arabia’s next steps will determine whether our strategic partnership is salvageable,” he added after the call with Saudi Energy Minister Prince Abdulaziz bin Salman, Deputy Defense Minister Khalid bin Salman, and the Saudi ambassador to the United States, Princess Reema bint Bandar bin Sultan.
Sullivan, who along with Cramer sits on the Senate Armed Services Committee, also said that Riyadh’s decision to increase production to over 12 million barrels “greatly exacerbated the turmoil in global energy markets,” adding to the pain inflicted by the coronavirus pandemic. The turmoil is still ravaging the US labor market, as “tens of thousands” were laid off and energy companies were forced to close.
“Actions speak louder than words. The Kingdom needs to take sustainable, concrete actions to significantly cut oil production, and it needs to do so soon,” he said.
Meanwhile, Ted Cruz of Texas, who also participated in the conversation, accused Riyadh of trying to kill off Texas oil producers by flooding the market. “If you want to behave like our enemy, we’ll treat you like our enemy,” he said as cited by the Dallas Morning News.
However, in his view, Russia is also to blame for the problems along with Saudi Arabia, while Mexico should not be blamed for lack of cooperation. “It wasn’t Mexico that launched this economic assault on US producers. It was Russia and Saudi Arabia… who sought to exploit this pandemic.”
The previous OPEC+ deal collapsed in early March when Russia and Saudi Arabia failed to find common ground during talks in Vienna. While Riyadh insisted on deeper output cuts, Moscow wanted to keep them as they were. This prompted the Kingdom to slash its oil prices to gain market share and ramp up production to record levels.
The calls to stick to the proposed oil plan come as the members of the OPEC and non-cartel members led by Russia are still trying to finalize the new agreement. The accord has been in limbo since Thursday, as Mexico balked at the suggested production cuts.