Triple trouble

20 March 2020 By George Hay Follow @gfhay

To hike low crude prices, the U.S. President needs a big producer to cut supply. He already has leverage over Saudi Arabia and more scope to threaten Russia with sanctions. Add in output curbs by shale, and a path exists to keep American producers afloat but oil values in check.

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U.S. President Donald Trump on March 19 said he would get involved in the oil price war between Saudi Arabia and Russia at the appropriate time, saying low gasoline prices were good for U.S. consumers even as they were hurting the industry.

"We are trying to find some kind of a medium ground," Trump told reporters at a White House news conference, adding that he had spoken to several people about the dispute.

The Trump administration is considering a diplomatic push to get Saudi Arabia to close its taps and using the threat of sanctions on Russia to force them to reduce output, the Wall Street Journal reported, quoting unidentified sources.

The Kremlin said on March 20 there was no price war between Russia and Saudi Arabia, that relations were good, and that it didn’t think anyone should intervene. It described reports that the U.S. might consider sanctioning Russia to reduce oil output as “seasonal madness provoked by coronavirus”.

Brent crude oil futures were trading at $28.60 a barrel as of 1241 GMT, up 0.5% for the day.

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