The US has taken advantage of the collision between Saudi Arabia and Russia. Having unleashed the oil price war against the most powerful rival, Saudi Arabia slashed its crude prices for regular buyers. The US immediately pumped up all available commercial and strategic inventories with cheap crude oil. Afterwards, Washington decided to exert its influence to stem turmoil in the global oil market. The US leader even made an attempt to mediate between Saudi Arabia’s Crown Prince Mohammed bin Salman and Russia’s President Vladimir Putin. Following a joint online conference between the parties, Donald Trump expressed confidence that Saudi Arabia and Russia would strike a deal in a few days. Oil prices were plumbing new depths for a few weeks, tumbling to the lows unseen since early 2000-es. Having replenished oil tanks in full, the White House was even serious about slapping high tariffs on imported oil, but they gave up this idea. Indeed, amid current low oil prices, neither Saudi Arabia nor Russia would find buyers in the American market. Thus, tariffs on imported oil make no sense.
A collapse of oil quotes convinced all oil major oil exporters that the only solution would be a new pact on oil production cuts. The emergency OPEC+ online meeting was scheduled for April 9, 2020. The event ended with a new historic oil production cut agreement as the COVID-19 pandemic saps demand for crude oil. While oil is trading at record lows, some top energy companies such as ExxonMobil, BP, Royal Dutch Shell, Total, and Equinor have increased debt by $32 billion. They found support from the Federal Reserve as the regulator revived the crippled debt market with its stimulus programs. Now the companies can rely on leveraged funds.
