Bending the knee

Trump’s oil diplomacy came in a whirlwind of calls with Saudi King Salman, Crown Prince Mohammed and Russian President Vladimir Putin starting in mid-March. The Kremlin confirmed Putin’s conversation with Trump and said they discussed both oil supply cuts and the coronavirus pandemic.

On the April 2 call with Prince Mohammed, Trump told the Saudi ruler he was going to “cut them off” the next time Congress pushed a proposal to end Washington’s defence of the kingdom, according to the source with knowledge of the call. Trump also publicly threatened in early April to impose tariffs on oil imports from Saudi Arabia and Russia.

After the conversation with the Saudi crown prince, and another the same day with Putin, Trump tweeted that he expected Saudi Arabia and Russia to cut output by about 10 million barrels, which “will be GREAT for the oil & gas industry!” 

Riyadh and Moscow later confirmed they had restarted negotiations.

On 3 April, Trump hosted a meeting at the White House with senators Cramer, Cruz, and Sullivan, and oil executives from companies including Exxon Mobil Corp, Chevron Corp, Occidental Petroleum Corp and Continental Resources.

During the public portion of the meeting, Cramer told Trump that Washington can use the billions of dollars it spends defending Saudi Arabia on other military priorities “if our friends are going to treat us this way.”

The prospect of losing U.S. military protection made the royal family “bend at the knees” and bow to Trump’s demands, a Middle Eastern diplomat admitted.

After prolonged and fractious negotiations, top producers pledged their record output cut of 9.7 million bpd in May and June, with the understanding that economic forces would lead to about 10 million bpd in further cuts in production from other countries, including the United States and Canada.

Trump hailed the deal and cast himself as its broker. “Having been involved in the negotiations, to put it mildly, the number that OPEC+ is looking to cut is 20 Million Barrels a day…” he tweeted shortly after the deal.

Riyadh also took credit. Saudi energy minister Prince Abdulaziz told Reuters at the time that the crown prince had been “instrumental in formulating this deal.”

Timothy Gardner, Steve Holland, Dmitry Zhdannikov, Rania El Gamal

© Reuters 2020

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