President Donald Trump spoke with Russian President Vladimir Putin on March 30 about the threats to both nations’ energy sectors posed by the dual forces of the CCP virus pandemic and Moscow’s ongoing oil price war with Riyadh.
Trump told “Fox and Friends” on March 30 that he would speak with Putin after the interview.
“One of the subjects we’re going to be talking about is energy. We don’t want to have an industry that’s wiped out. And by the way, bad for them and bad for everybody,” Trump said.
The price of oil had dropped to roughly $20 a barrel on March 30, down from a peak of more than $64 at the beginning of this year. The plunge is driven by a standoff between Russia and Saudi Arabia over reducing production coupled with a steep decline in global demand due to the spread of the CCP (Chinese Communist Party) virus, commonly known as novel coronavirus.
“Russia and Saudi Arabia are fighting, and they’ve driven down the price of oil. I never thought I’d be saying that, but maybe we have to have an oil increase because we do. The price is so low now,” Trump said.
“This is a fight between Saudi Arabia and Russia having to do with how many barrels to let out. And they both went crazy.”
The White House and the Kremlin didn’t respond to a request for details about the conversation between the two leaders. Russian news agency Interfax confirmed the conversation and noted that Trump had requested the call.
The two leaders discussed the global oil market and “the possibility of cooperation between the two countries” on dealing with the COVID-19 pandemic, according to a message from the Kremlin relayed by Interfax.
The day before the call, the Russian government bought out the Venezuelan assets of Russian oil giant Rosneft in a move likely designed to skirt the sanctions imposed by Washington on Rosneft. Trump noted that he doesn’t intend to lift any sanctions on Russia.
The CCP virus pandemic and the resulting plunge in crude prices will result in a leaner, stronger oil industry but raise the risk of shortages further down the line, Goldman Sachs analysts said on March 30.
Refiners across the world have been forced to halt operations because of steep falls in demand. This may in turn cause an oil shortage, pushing prices above the Wall Street bank’s $55 a barrel target for 2021, the bank said.
“The oil price war is made irrelevant by the large decline in demand and has made a coordinated supply response impossible to achieve in time,” Goldman said.
The national gas price average dropped for the fifth straight week on March 30, down 73 cents per gallon from the same time last year, according to GasBuddy analyst Patrick De Haan.
“Refineries are either starting to throttle back crude runs, shut units completely, or in isolated situations for extremely challenged refineries, shutting down completely,” De Haan wrote on Twitter.
Reuters contributed to this report.