US President Donald Trump has acknowledged that his administration is considering stopping all imports of crude oil from Saudi Arabia in an effort to save the American oil industry.
When asked by reporters at his daily press conference about requests from Republican lawmakers to block Saudi oil shipments, Trump replied, "Well, I'll look at it." He said that he had heard of the proposal before the media session. "We certainly have plenty of oil, so I'll take a look at it," he added.
The possible move comes in response to the price of US crude oil having dropped to a negative on markets yesterday. That's the first time in history that the US oil and drilling industry has taken such a hit.
With production and supply increasing exponentially and demand falling due to the coronavirus pandemic, the price of US crude fell to $37.63 per barrel. This was a result of desperate market traders paying to get rid of the oil as storage space was almost running out. This staggering collapse in prices, prompted by the oil price war between Russia and Saudi Arabia last month, threatens to bankrupt the US oil industry.
Trump has downplayed the crisis, though, describing the sharp drop as a short-tern phenomenon and the result of a "financial squeeze". He said that the domestic oil industry is suffering primarily from a lack of demand due to the lockdowns enforced in many states, where residents have been ordered to stay at home in an effort to curb the spread of the virus.
The slump was inevitable, explained the US President. "The problem is no one is driving a car anywhere in the world, essentially… Factories are closed, businesses are closed. We had really a lot of energy to start off with, oil in particular, and then all of a sudden they lost 40 per cent, 50 per cent of their market."
The Republican lawmakers' calls to prevent Saudi oil imports is the latest move that could strain bilateral relations between Washington and Riyadh, amid already-tense relations due to the oil price war. Last month, the lawmakers also called for Saudi Arabia to leave the Organisation of the Petroleum Exporting Countries (OPEC) cartel, and even threatened to withdraw US military forces stationed in the Kingdom.