Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Natural Gas | Oil

Tariffs, free markets, and OPEC criticism: Trump's mixed views on oil price plan

Commodities | Agriculture | Grains | Energy | Electric Power | LNG | Natural Gas | Oil | Crude Oil | Metals | Coronavirus

Market Movers Americas, June 29-July 3: Rig count rises, but pandemic continues to pressure US commodities

LNG | Natural Gas | NGL

Platts LNG Alert

Capital Markets | Commodities | Oil | Crude Oil | Refined Products | Fuel Oil | Gasoline | Jet Fuel | Naphtha | Marine Fuels | Equities | Financial Services | Banking | Non-banks | Private Markets

North American Crude Oil Summit, 3rd annual

LNG | Natural Gas

JKM LNG H1 derivatives trade grows 83% on year to 78.8 million mt

Tariffs, free markets, and OPEC criticism: Trump's mixed views on oil price plan


Trump offers no support for OPEC+ deal, highlights low US gas prices

Advisers continue to press for tariffs, import restrictions

API endorses free market, but analysts say government action needed

Washington — US President Donald Trump spent the weekend downplaying a potential OPEC+ production agreement, embracing both the free market's ability to resolve the price collapse, celebrating the benefits of sub-$1/gal gasoline to US consumers and threatening tariffs on oil imports.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

And while his messages appeared mixed, Trump has offered no signal that the US government will support a global supply intervention, which analysts believe may be necessary to support prices and a US shale sector teetering on collapse.

On Saturday, during a White House press conference, Trump threatened oil import tariffs, claimed Russia, Saudi Arabia and other OPEC nations would be "destroyed" if they did not reach a new supply cut deal, and leveled his harshest criticism of OPEC since he was elected in 2016.

On Friday, a day after trumpeting a potential supply agreement between the Saudis and Russians, Trump offered no support for a number of government intervention proposals the administration has been considering, claiming the free market would "figure it out."

And while Trump's public allegiance to the free market may be unsurprising for a US president, and appeared to be contradicted by his support for tariffs a day later, analysts and some of his top energy advisers see this as a naïve view of the global oil market and a strategy which will further sink the floundering US shale sector.

"I think that the idea of a completely free market was abandoned already," Senator Kevin Cramer, a North Dakota Republican, told S&P Global Platts.

Economic Patriotism

Cramer believes that the US must better protect its domestic energy and, rather than delude itself that a free oil market can ever be a reality, needs to start employing "economic patriotism" in the sector. In a phone call with Trump last week, Cramer proposed a plan to limit US oil imports, particularly from Saudi Arabia and other OPEC nations, and has called for tariffs on Saudi and Russian crude imports and a drawback of military support of Saudi energy infrastructure in response to its ongoing price war with Russia.

Saudi Arabia energy minister Prince Abdulaziz bin Salman issued a statement Saturday which noted that the OPEC kingdom was a key investor in the US oil sector.

Cramer attended a meeting between Trump and oil market executives Friday afternoon where analysts speculated that Trump might endorse one of several options, including an import tariff plan offered by Continental Resources' Harold Hamm, who was also at the meeting. Trump on Saturday said he would "do whatever I have to do" to protect the US oil industry, including imposing tariffs.

But instead of endorsing protectionist measures endorsed by many of his closest energy advisers, Trump appears to be taking the advice of American Petroleum Institute CEO Mike Sommers, who has cautioned against interventionist measures, such as Jones Act waivers or import and export bans, and pushed support for a free market.

Boom-Bust Cycles

But without some government intervention, be it though new restrictions on flows or state mandated production curtailments, like those some want imposed in Texas, a corresponding supply response to the ongoing, historic decline in demand might lag significantly, further exacerbating future boom-bust cycles in the market, analysts said.

"Even the most free-market countries cannot tolerate boom and bust price cycles for a commodity that is tantamount to economic lifeblood," Bob McNally, president of the Rapidan Energy Group, wrote in a paper released Friday.

Andrew Stanley, an oil market analyst at The King Abdullah Petroleum Studies and Research Center, said without some globally organized policy push prices will continue with no clear path to a price recovery.

"The only way that we can likely see some semblance of normality or stability returning back to the market during a demand shock of this scale would be through widespread international cooperation between oil producing countries," said Stanley, in an interview with the Platts Capitol Crude podcast.

Amy Myers Jaffe, director of the program on Energy Security and Climate Change at the Council on Foreign Relations, told Platts that while a commitment to the free market makes sense normally, the global spread of the coronavirus and worldwide restrictions on movement have pushed the market into times which are hardly normal.

"In today's COVID-19 situation, ensuring that fuel supply chains for US good logistics is of the highest priority," she said. "That means ensuring that there is adequate access to storage and distribution to keep our fuel system in steady operation, that wild price swings don't destroy the businesses we need to maintain that system over the long run and that our military always has secure and appropriate access to the fuel it needs."

For now, the Trump administration is opening millions of barrels of Strategic Petroleum Reserve capacity to US producers for storage and Trump has indicated he wants to continue to fill government stocks with low-priced crude. Trump is also likely to continue to talk with the leaders of Saudi Arabia, Russia and other oil producing countries about the next possible steps as an OPEC+ meeting scheduled for Thursday nears.

But what Trump wants and how far the US is willing to go remains to be seen.