As Congressional voices and US oil companies have grown louder in urging President Trump to mount a muscular pushback against the Russians and Saudis flooding the market following their spat early this month that triggered an ongoing oil-price war — which lately witness crude falling to $20 yesterday — the administration has said it plans to get involved at "the appropriate time" and hopes to find a "middle ground". Trump said Thursday at a White House briefing: "They are in a fight on price, on output," and indicated that "At the appropriate time I will get involved."
Early this month the Saudis were caught completely off-guard when Putin said Russia would ignore Riyadh and OPEC+ plans to significantly cut production, effectively and dramatically overturning the balance of power in the oil world while declaring war on US shale, sending crude prices crashing and leaving dozens of American producers teetering on bankruptcy.
The WSJ reports Thursday that the White House could be ready to jump into the fray: "The administration is considering intervening in the Saudi-Russian oil-price war with a diplomatic push to get the Saudis to cut oil production and threats of sanctions on Russia aimed at stabilizing markets, according to people familiar with the matter."
But it appears sanctions are what backed the Russians into a corner in the first place — enough to risk a price war which the Kremlin claims it can weather for years to come.
On Wednesday North Dakota Republican Senator Kevin Cramer wrote a letter to Trump declaring “We will not be bullied,” and urging a position of strength against “Foreign nations... now using the environment of the worldwide spread of COVID-19 to flood the market and cripple our domestic energy producers.”
Sen. Cramer further condemned Russia's “bullying tactics” which have “become the norm” — but in a rare lashing out at our 'partner' also took Saudi Arabia's “concerning” actions to task.
Trump seemed to respond to these concerns, saying a day later: "It's very devastating to Russia, because their whole economy is based on that and we have the lowest oil prices in decades. I would say it's very bad for Saudi Arabia."
"I spoke with numerous people... and we have a lot of power over the situation. We are trying to find some kind of a medium ground," Trump said.
The WSJ describes further that the potential new strategy would aim to resolve the Russia-Saudi price war which could involve State Dept. level engagement with the Saudis and more critically direct dialogue through the National Security Council, also with threats of yet more sanctions on Russia.
However, the Russians appear ready and willing to unleash vengeful chaos on global markets aimed at its geopolitical enemies while hunkering down, with the Saudis too showing willingness to play chicken.
Amid Trump's statements and the new reports the WTI rallied in what could be a record-setting single day, increasing by 22.28% in afternoon trading - though still trading down double digits since the start of the year.
Meanwhile, the current OPEC agreement to curb production will expire on April 1st, after which it's expected Russia, Saudi Arabia and UAE will dump a flood of cheap crude onto the market.