WASHINGTON – The Trump administration believes ahead of an expected OPEC+ meeting this week that major oil producers such as Saudi Arabia and Russia will honor their pledges to cut crude production and will not damage the global economy by changing course, a senior official said on Tuesday.
We trust that other major oil producers will not revert to policies that impede an orderly and swift recovery from these unprecedented global economic conditions,” a senior administration official told Reuters in response to a question about the administration’s approach to global oil producers ahead of the OPEC+ meeting expected on Thursday.
In early April, when Saudi Arabia and Russia boosted oil output in a war for market share during the height of the coronavirus pandemic – action that strangled fuel demand and slammed crude prices – the administration took an aggressive stance.
Trump told Saudi Crown Prince Mohammed bin Salman that unless OPEC started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom.
Now, OPEC, of which Saudi Arabia is the de facto leader, and Russia, which forms part of OPEC+, are moving closer to a compromise on extending the cuts and discussing a proposal to roll over supply curbs into July or August, three OPEC+ sources said on Monday.
While the stance is apparently more relaxed, Trump is still making calls. Trump and Russian President Vladimir Putin discussed the OPEC+ oil output cuts and other issues including arms control in a call on Monday, the Kremlin said.
Reduced production from OPEC+, combined with a record decline in output from non-members such as the United States, has helped lift global oil prices toward $40 per barrel, though well below prices of nearly $64 in January.
An oil industry source, who communicated with an official in the office of U.S. Energy Secretary Dan Brouillette, said the Energy Department is keeping a patient, but watchful eye.
The Energy Department did not immediately respond to requests for comment. “There was a time when the administration wanted an OPEC+ deal at any cost and now it kind of seems more like they are letting it play out,” the industry source said.