Washington — US President Donald Trump has tried tweets, speeches and even a phone call, but his campaign of threats so far has failed to compel Saudi Arabia and other OPEC members to address rising oil prices, at least in the manner he wants, analysts said Monday.
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Concerned about the impact rising gasoline prices may have on the US economy and on his Republican party's chances to maintain control of the House and Senate in November's midterm elections, Trump wants Saudi Arabia and others to start outlining their plans for boosting global supply in hopes doing so will cause oil prices to reverse their current course.
ICE December Brent settled at $84.98/b Monday, while NYMEX November WTI settled at $75.30/b, both the highest settlements since 2014.
"Trump is very concerned about high oil prices, obviously," Joe McMonigle, an analyst with Hedgeye Risk Management, said Monday. "Trump believes he has an agreement with the Saudis and other countries to offset the barrels that will be lost [when Iran sanctions are reimposed in November]. He's basically holding them to account this."
The Trump administration wants the Saudis and other producers to begin publicly outlining "direct, concrete production numbers," which could quell rising oil prices, something these countries have so far been reluctant to do.
At the end of an OPEC/non-OPEC monitoring committee meeting in Algiers last week, for example, Saudi Energy Minister Khalid al-Falih told reporters that OPEC is reluctant to ramp up production too quickly due to fears of an oversupplied market.
"What makes this moment so awkward is [Trump] is focused on short-term market developments while [Saudi King Salman bin Abdulaziz al-Saud] is more concerned with medium-term trends," said Matt Reed, vice president of Middle East consultancy Foreign Reports. "Looking out to 2019, the Saudis see a market with slack. Why ramp up output now if it means they might have to negotiate a new round of production cuts next year? That's no easy task."
On Saturday, Trump spoke with Salman about "efforts to maintain supplies to ensure the stability of the oil market and ensure the growth of the global economy," according to the Saudi Press Agency.
The White House said that Trump and Salman spoke "on issues of regional concern," but administration officials declined to comment further about the call.
The phone call came four days after Trump, in a speech before the United Nations, accused OPEC nations of "ripping off" the world on oil prices.
"We want them to stop raising prices, we want them to start lowering prices and they must contribute substantially to military protection from now on," Trump said in the speech.
On September 20, Trump tweeted a similar argument, claiming that Middle East countries were benefiting from US military protection while pushing oil prices higher.
"The OPEC monopoly must get prices down now!" Trump tweeted.
Trump once again reiterated the point during a campaign rally in West Virginia Saturday night, after his phone call with Salman that morning.
"Why are we subsidizing their military?" Trump asked.
Reed with Foreign Reports said Trump's public criticism of the Saudis may, ultimately, mean little.
"The Saudis generally don't lose sleep over what US politicians say at rallies and fundraisers," Reed said. "They've heard it all before."
But McMonigle with Hedgeye said Trump's criticisms were getting attention.
"They're definitely not used to this," McMonigle said.
McMonigle said the criticism may also lead to additional details of production increases in the near future.
"I wouldn't be surprised to see more announcements coming out of the ministry or Aramco and possibly the UAE and others," he said.
-- Brian Scheid, firstname.lastname@example.org
-- Edited by Annie Siebert, email@example.com