👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

U.S. senators press Saudi officials to put oil cut in motion

Published 04/11/2020, 04:18 PM
Updated 04/12/2020, 09:40 AM
© Reuters. An employee rides a bicycle next to oil tanks at Saudi Aramco oil facility in Abqaiq

(This April 11 story has been refiled to replace "boost" with "cut" in paragraph six.)

By Timothy Gardner

WASHINGTON (Reuters) - Republican U.S. senators from oil states who recently introduced legislation to remove American troops from Saudi Arabia said on Saturday they had spoken with three officials from the kingdom and urged them to take concrete action to cut crude output.

Saudi Arabia and Russia were close to finalizing a deal with other producers in the informal OPEC+ group to cut crude output by a record 10 million barrels per day (bpd), or about 10% of global output.

Oil prices had fallen to 18-year lows as the coronavirus outbreak has closed down economies across the world and after Saudi Arabia and Russia boosted output in a race for market share.

The call was led by Senators Dan Sullivan and Kevin Cramer, who introduced legislation in March to remove U.S. troops, Patriot missiles and THAAD defense systems from Saudi Arabia unless it cut output.

There were 11 Republican senators on the nearly two-hour call, including Bill Cassidy, who introduced legislation last week to remove the U.S. troops in 30 days, a month faster than the previous legislation.

While the bills are unlikely to pass, the senators have played an unusual role in raising pressure on longtime ally Saudi Arabia, as President Donald Trump, a fellow Republican, has been in talks with Crown Prince Mohammed bin Salman urging him to cut output.

They spoke with Saudi Energy Minister Prince Abdulaziz bin Salman, Deputy Defense Minister Khalid bin Salman and the Saudi ambassador to the United States, Princess Reema bint Bandar bin Sultan.

Sullivan, of Alaska, applauded Saudi Arabia's taking part in the agreement to cut output, but said "actions speak louder than words."

"The Kingdom needs to take sustainable, concrete actions to significantly cut oil production, and it needs to do so soon," Sullivan said.

Saudi Arabia's action to boost production during a pandemic was "inexcusable" and "won't be forgotten," said Cramer, of North Dakota.

The United States, the world's top oil producer, is gradually cutting about 2 million bpd of output as reduced demand and low oil prices force some heavily leveraged producers into bankruptcy.

The push by Republican senators was a sign of how Congress could raise pressure on Saudi Arabia if it does not stick to the oil cut plan. If the kingdom does not cut output, pointed measures could be included later this year in must-pass legislation such as the annual defense policy bill.

In January, the United States had 2,500 military personnel in Saudi Arabia. In October 2019, Washington deployed about 3,000 troops there at a time of heightened tensions with Iran.

© Reuters. An employee rides a bicycle next to oil tanks at Saudi Aramco oil facility in Abqaiq

The Saudi embassy in Washington did not immediately respond to a request for comment.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.