Trump aims to ease U.S. oil industry's cash crunch, no
plan to trim output: sources
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[April 04, 2020] By
Laila Kearney
(Reuters) - U.S. President Donald Trump has
directed his cabinet to find ways to ease a cash crunch in the drilling
industry after oil company executives told him in a Friday meeting it
was among their top concerns, according to three sources briefed on the
matter.
Trump hosted the White House meeting with executives from Exxon Mobil,
Chevron Corp, Continental Resources and others as his government seeks
to contain the fallout from an historic slump in oil prices that has
threatened the industry with bankruptcies and layoffs.
Oil prices have dropped by about two-thirds this year as the coronavirus
outbreak crushes fuel demand and major producers Saudi Arabia and Russia
engage in a price war.
U.S. Energy Secretary Dan Brouillette told a broad industry conference
call following Trump's meeting with the oil executives that Trump had
directed him to work with Treasury Secretary Steven Mnuchin to look for
ways to immediately fix the energy industry's "liquidity shock",
according to sources who listened in on the call.
The measures could include easing banking regulations to expand the oil
industry's access to credit, which has shrunk rapidly alongside the
decline in oil prices, Brouillette said, according to the sources.
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Brouillette also pointed out that the administration was helping the
industry cope with a rapidly worsening storage glut in the United States
by leasing out space in the nation's emergency oil reserve, the sources
said. Interior Secretary David Bernhardt, who was also on the call, said
he was making federal lands available to drillers and considering a
series of other options to help oil companies, but provided no details.
The briefing quashed rumors that the Trump administration was planning
to announce measures to restrict U.S. crude oil production to help lift
global prices, as it pushes Saudi Arabia, Russia and other major oil
producers to do so.
Trump has highlighted his efforts to push Moscow and Riyadh to end their
price war and tighten their taps, and Brouillette said on the call that
the administration was not negotiating with those countries, only
encouraging them to make a deal amongst themselves.
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![](../images/040420pics/busine47.jpg)
President Donald Trump speaks during a roundtable with energy sector
CEOs in the Cabinet Room of the White House in Washington, U.S.,
April 3, 2020. REUTERS/Tom Brenner
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The energy industry had also expected the administration to offer some
additional ways to help the industry weather the crisis, including waiving
royalty payments from drillers for oil produced on federal lands, imposing an
import tariff on foreign crude oil or easing shipping regulations. One of the
sources called the outcome "a waste of time".
After the meeting, Trump said his administration planned to make sure the U.S.
oil industry stays in "good shape".
Asked if he is considering tariffs on Saudi oil, Trump said: "Tariffs are a way
of evening the score ... Am I doing it now? No. Am I thinking about imposing it
as of this moment? No. But if we're not treated fairly it's certainly a tool in
the toolbox."
He added that he expected Saudi Arabia and Russia to "settle their dispute very
quickly."
Trump had said on Thursday that Saudi Arabia and Russia had agreed to cut output
by an unprecedented 10 million to 15 million barrels per day (bpd), representing
10% to 15% of global supply, after he discussed the issue with their leaders.
The countries did not confirm the plan, but said they would discuss ways to
stabilize the market with other major world oil producers.
The United States in recent years has become the world's biggest oil producer,
at times putting its exports in competition with Russia and countries in the
Organization of the Petroleum Exporting Countries.
The American Petroleum Institute, which represents the U.S. oil and gas
industry, had asked Trump for regulatory relief to ensure steady supplies during
the pandemic. The administration has since announced a temporary easing of
environmental enforcement.
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The API, many of whose members operate globally, has opposed the idea of an oil
import tariff, which could hurt domestic refiners and complicate projects and
business relationships across borders.
(Reporting by Timothy Gardner, Jeff Mason, Steve Holland and Diane Bartz in
Washington; Jessica Resnick-Ault, Stephanie Kelly, and Jarrett Renshaw in New
York; Writing by Richard Valdmanis; Editing by Richard Chang, Dan Grebler,
Daniel Wallis and David Gregorio)
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