US President Donald Trump yesterday said he would be willing to impose a tax on foreign oil should Saudi Arabia and Russia fail to reach a settlement in their dispute in cutting oil production which has contributed to the global collapse in energy prices.
Referring to the two countries, Trump told reporters at the daily White House coronavirus briefing "If they don't get along, I would do tariffs, very substantial tariffs, I would absolutely do that", adding that he intends on protecting the US oil industry.
The Financial Times reported that Canadian officials have also held discussions with Washington regarding the imposition of tariffs. The energy minister of Alberta – Canada's largest oil producing province said "OPEC+ started this fire and they have to put it out. We're not going to surrender our industry and we're prepared to go the distance here".
Russia's Kremlin spokesperson also warned yesterday against rising oil production, indicating that the Saudis had introduced "an unprecedented discount and boosted oil production", adding that the move had led to "a situation where all oil storage facilities in the world could be filled."
There are fears that amid large parts of the world in lockdown over the COVID-19 pandemic, there will be too much crude available, putting pressure on prices. Last week, crude prices soared by a record increase following Trump's claim that an agreement was imminent.
Saudi Arabia and Russia were due to meet today, but this meeting has now been postponed until Thursday after Saturday's remark by Saudi Foreign Minister Prince Faisal Bin Farhan that comments by Russia's Vladmir Putin laying blame on Riyadh for the end of the OPEC+ pact between the two countries last month were "fully devoid of truth".
Trump has urged the rival oil producers to cut production by as much as 15 million barrels a day, Russia has said it is willing to cut 10 million barrels a day as part of a global production-cut agreement that includes the US, however as Radio Free Europe points out, unlike Russia and Saudi, whose oil industries are largely state-owned, the American oil industry is comprised of private companies, with the federal government having little say over oil output.