
An ambulance is parked outside the U.S. Capitol after several staffers tested positive for COVID-19. A group of senators are trying to pressure Saudi Arabia and Russia to end their oil market share war. (Source: Shutterstock.com)
WASHINGTON—U.S. senators on March 18 raised pressure on Saudi Arabia and Russia to stop the price war that is sinking global oil prices as they held talks with the kingdom’s U.S. envoy and separately urged President Donald Trump to impose an embargo on oil from the two countries.
Oil prices plummeted to 18-year lows on March 18 as governments around the world accelerated lockdowns to counter the coronavirus pandemic that is causing global fuel demand to collapse.
A war over crude oil market share between petroleum producers Russia and Saudi Arabia, which erupted after their three-year deal to curtail output collapsed earlier this month, has exacerbated the price plunge. It has also led to charges by some U.S. lawmakers that Russia and Saudi Arabia were targeting U.S. shale oil producers who have higher production costs.
“Unfortunately, these bullying tactics by Russia have become the norm, but the actions of our close strategic partner Saudi Arabia are particularly concerning,” Sen. Kevin Cramer (R-N.D.), said in a letter to fellow Republican Trump.
Cramer, who advised Trump’s 2016 campaign, urged the president in the letter, a copy of which was seen by Reuters, to embargo oil from Russia, Saudi Arabia, and “other OPEC nations like Iraq.”
Cramer and nine other Republican senators, including John Hoeven of North Dakota and Dan Sullivan of Alaska, had a call on March 18 with Saudi Ambassador to the United States Princess Reema bint Bandar bin Sultan, hoping to convince the kingdom to stop flooding global oil markets.
“We need stability in the oil markets during these challenges with COVID-19 to ensure we don’t lose long-term capacity in this essential industry,” Hoeven said in a statement about the call.
‘Reliable Partner’
Cramer and Sullivan had written a letter on March 16 to Saudi Arabia’s Crown Prince Mohammed bin Salman, signed by 13 senators, reminding the de facto leader that the United States has been a “strong and reliable partner for decades” but that the output boost has called into question the role of the kingdom as a force of stability in oil markets.
Trump, who is running for re-election in November, at first celebrated low fuel prices. “Good for the consumer, gasoline prices coming down!” Trump wrote in a tweet last week. He has long championed a policy of energy dominance which has included offering Europe U.S. natural gas exports as an alternative to Russian natural gas.
The Trump administration also recently placed sanctions on Russia’s Nord Stream 2 natural gas pipeline to Germany and on a unit of state oil company Rosneft over marketing of Venezuelan crude oil.
SPR Purchases
On March 13, Trump called on the Energy Department to buy 77 million barrels of oil to stash in the Strategic Petroleum Reserve, to help support domestic oil producers. But some of that nearly $2 billion cost, at March 18 prices, would have to be paid by Congress.
Trump talked about oil markets with Saudi’s crown prince in a call on March 9. In addition, the U.S. ambassador to Saudi Arabia John Abizaid spoke with the Saudi energy minister on March 12 about oil markets, the State Department said, but there have been few details about those conversations.
Recommended Reading
Equinor Commences First Tranche of $5B Share Buyback
2025-02-07 - Equinor began the first tranche of a share repurchase of up to $5 billion.
Rising Phoenix Capital Launches $20MM Mineral Fund
2025-02-05 - Rising Phoenix Capital said the La Plata Peak Income Fund focuses on acquiring producing royalty interests that provide consistent cash flow without drilling risk.
Chevron Makes Leadership, Organizational Changes in Bid to Simplify
2025-02-24 - Chevron Corp. is consolidating its oil, products and gas organization into two segments: upstream and downstream, midstream and chemicals.
Elliott Nominates 7 Directors for Phillips 66 Board in Big Push for Restructuring
2025-03-04 - Elliott Investment Management, which has taken a $2.5 billion stake in Phillips 66, said the nominated directors will bolster accountability and improve oversight of Phillips’ management initiatives.
Shell Shakes Up Leadership with Upstream and Gas Director to Exit
2025-03-04 - Zoë Yujnovich, Shell’s Integrated Gas and Upstream director, will step down effective March 31.