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Saudi Arabia And The U.S. Could Form The World’s Newest Oil Cartel | OilPrice.com

The United States and Saudi Arabia have been discussing the idea of setting up an oil accord, Bloomberg reports, citing Energy Secretary Dan Brouillette. Such an agreement would effectively amount to a cartel, which, by definition, is a group of independent market participants agreeing to act together to influence the market in a way favorable to them.

For now, however, this is just an idea that some officials in the Trump administration support. The chance of it becoming anything more is unclear, according to Brouillette.

“There are many, many ideas that are floated around the policy space, that is one of them,” the U.S. Energy Secretary told Bloomberg in an interview. 

“I don’t know that it is going to be presented in any formal way.”

The U.S. oil industry has suffered a heavy blow from the combination of the coronavirus outbreak and the price war that Saudi Arabia started after Russia refused to cooperate on deeper production cuts. Producers are slashing spending plans, suspending share buybacks, and some have already asked oilfield service providers for substantial discounts to their services.

West Texas Intermediate, the U.S. benchmark, has shed about 60 percent of its value since the start of the year. 

According to Reuters’ John Kemp, it has further to fall unless the economic outlook for the country—and the world—improves sharply and quickly. This outlook is not good news for either the shale industry or the supermajors in the U.S., which makes the administration’s moves concerning Saudi Arabia only logical. But nothing is certain yet.

“As part of the public policy process, if you will, our interagency partners often get together and talk about a number of different items, but we’ve made no decision on this,” Brouillette told Bloomberg.

“At some point we will engage in a diplomatic effort down the road. But no decisions have made on anything of that nature.”

By Irina Slav for Oilprice.com

https://oilprice.com/Energy/Crude-Oil/Saudi-Arabia-And-The-US-Could-Form-The-Worlds-Newest-Oil-Cartel.html

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cudwieser
cudwieser
March 25, 2020

Unofficially the US and Saudi Arabia have always been a cartel along with the UK. All this would be is putting names on the dotted line.

Obviously Clueless
Obviously Clueless
March 26, 2020

All things are 3. 1. Last spring Saudi floats abandoning the USD for trading oil. In the summer we got a number of false flag operations by … trying to open up a war between USA and Iran. 2. Last fall Saudi conducts secret negotiations with Iran leading to the killing of Suleimani. Something that almost succeeded in opening up a war between USA and Iran. 3. Saudi presents Russia with an un-edible plan for extending the OPEC+ production plan. Saudi reacts to an obvious Russian refusal by rebating the oil price 10 USD and increasing oil production. Hurting first… Read more »

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