American shale oil companies are calling for a number of measure to reprimand Saudi Arabia including denying the kingdom access to its oil refinery in the US, as part of an aggressive lobbying campaign against Riyadh.
The shale industry, which has been hit hard by the Saudi-Russia oil price war, have recruited Rick Perry, according to the Financial Times, in an effort to penalise the two parties at the centre of the row, though it seems that American companies have far greater leverage over Riyadh then they do against Moscow.
Perry, who was President Donald Trump’s energy secretary, is expected to lead the shale industry’s effort by urging the White House to consider suspending US military aid to Saudi Arabia and preventing Saudi crude from reaching the kingdom’s large Motiva refinery in Port Arthur, Texas USA.
With an annual revenue that’s said to top $24 billion annually, Port Arthur Refinery is the largest oil refinery in North America which came under full Saudi control in 2016. Riyadh has also left itself exposed through its $350 billion arms deal with Washington, which often gets used as a political football by US lawmakers to threaten the kingdom.
Though both options are being considered, denying Saudis access to their refinery is said to have the biggest support. “The idea that is gaining the most traction is to target Motiva,” an executive at a shale producer told the FT.
American shale firms are said to be facing an existential crisis due to the slump in oil price at the start of March after global demand for crude oil crashed as a result of the coronavirus outbreak. Given that most shale producers are unprofitable at prices below $50 a barrel, the current price of $20 a barrel has pushed shale companies into bankruptcy.
The Saudis have been accused of exacerbating the crises by increasing production in a bid to increase their market share and price out competitors like the US shale industry.
President Trump, who usually pleads to the Saudis to keep oil prices low, has nonetheless taken a rather serious tone and appointed a special envoy to Riyadh to stabilise the oil market.
rump is also due to meet oil industry executives today where he will discuss strategies if Saudi Arabia and Russia fail to quickly agree to cut supply.
“Plan A is getting Saudi Arabia and Russia to talk and cut. But if that takes too long or fails, the president will resort to plan B — protectionist measures to assist domestic producers,” Bob McNally, head of consultancy Rapidan Energy Group and a former White House adviser, is reported saying.
Industry analysts doubt whether these efforts will stabilise the market. “The scale of the collapse in oil demand from Covid-19 is staggering, and nothing the US alone can do will counter it,” said Jason Bordoff, head of Columbia University’s Center on Global Energy Policy.
سایت تابناک از انتشار نظرات حاوی توهین و افترا و نوشته شده با حروف لاتین (فینگیلیش) معذور است.