The U.S. government is turning to the old ways of its global strategy: tariffs and threats in an effort to prevent a crude oil price war from hitting dozens of U.S. companies, the Wall Street journal reported.
In conversations with oil company executives and lawmakers, U.S. President Donald trump proposed tariffs on imported oil, according to people familiar with the matter.
The strategy is designed to use us power to get Saudi Arabia and Russia to reduce their excess crude supplies.
Public reports indicate that low oil prices are increasingly hurting the U.S. oil industry.
On April 1st America's leading shale oil firm, whiting oil, filed for bankruptcy, and its share price plunged by more than 40%, making it the first big oil firm to collapse.
North American oil and gas companies face $200 billion in maturing debt over the next four years, including $40 billion in 2020 alone, according to moody's.
The U.S. oil industry employs about hundreds of thousands of workers, with many highly leveraged U.S. energy companies facing bankruptcy and layoffs.
Statistics show that the United States, Russia and Saudi Arabia are the top three crude oil producers in the world. The daily output of the United States is about 13 million barrels, that of Russia is about 11 million barrels and that of Saudi Arabia is also over 10 million barrels.
In normal times, the three producers together account for a third of global oil supply.
Each of the three major producers has its own needs in the oil game, making it difficult to agree on a new round of production cuts.
The organization of petroleum exporting countries (OPEC), led by Saudi Arabia, and its Allies, including Russia, will hold a video conference on Monday to negotiate a deal to cut output, according to an earlier announcement.
The official price of crude oil for may was released on May 10.
Oil ministers from the group of 20 leading economies are also due to hold an emergency meeting on the 10th, brokered by Saudi Arabia and the international energy agency.