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Prices surge as Trump says oil crisis will be resolved in ‘a few days’ 

April 2, 2020 at 2:35 pm

US President Donald Trump in New Hampshire, US on 10 February 2020 [Kyle Mazza/Anadolu Agency]

Donald Trump claimed earlier today that the oil crisis affecting the global markets will be resolved in “a few days”, having spoken with the leaders of both Saudi Arabia and Russia recently.

“Worldwide, the oil industry has been ravaged,” the US President told journalists. “It’s very bad for Russia, it’s very bad for Saudi Arabia. I mean, it’s very bad for both. I think they’re going to make a deal.”

He also announced that he has invited US oil executives to the White House in order to discuss the crisis and the solutions that could stabilise the “ravaged” oil industry, particularly with the coronavirus pandemic spreading around the world. “I’m going to meet with the oil producers on Friday. I’m going to meet with independent oil producers also on Friday or Saturday. Maybe Sunday. We’re going to have a lot of meetings on it.”

READ: Will the coronavirus claim Saudi’s ‘Vision 2030’ as its victim?

The ongoing crisis that has shaken global markets over the past month started when Saudi Arabia increased its oil production levels sharply, which resulted in prices dropping as low as $25 per barrel. It was predicted that the oil price war could bring the price down even further to $10 per barrel.

One result of the situation is that Saudi-US relations have become strained, with America being one of the primary stakeholders affected by what is said to be the worst crisis in a hundred years. In efforts to stabilise the situation, the US has reportedly taken a number of steps in recent weeks. They include Trump’s decision to send a special envoy to the Kingdom to negotiate, as well as Secretary of State Mike Pompeo’s call on Saudi Arabia to take responsibility for what is happening.

READ: Saudi to raise oil exports to 10.6mn barrels per day despite coronavirus crisis

In order to stabilise the industry, one of Trump’s options is to enforce tariffs on oil imports from Saudi Arabia, which could strain relations between Washington and Riyadh even further.

Following the US leader’s claim today that the situation could improve soon, the oil industry has already shown signs of revival, with oil prices surging by almost 10 per cent. The price of light crude oil, otherwise known as the West Texas Intermediate grading, rose sharply this morning in its predicted delivery for May from $20.31 to $22:80, an increase of 9.6 per cent.