Mar 17, 2020 - Energy & Environment

Senators to press Saudis on oil markets

Sen. Dan Sullivan (R- Alaska) is hosting a meeting with Saudi leaders. Photo: Michael Brochstein/SOPA Images/LightRocket via Getty Images

A group of Republican senators is slated to meet with the Saudi ambassador to the U.S. tomorrow to make the case that the kingdom should back off plans to flood the market with low-price crude.

Driving the news: The meeting hosted by Alaska Sen. Dan Sullivan follows an open letter to Saudi leaders from 13 senators, mostly from oil-producing states, which says "unsettled" energy markets are "unwelcome" amid the COVID-19 crisis.

We urge the Kingdom to assert constructive leadership in stabilizing the world economy by calming economic anxiety in the oil and gas sector at a time when countries around the world are addressing the pandemic.

Quick take: The long-shot effort to prod the Saudis into reconsidering their posture underscores the limits of White House claims of U.S. "energy dominance."

  • While the U.S. has become the world's largest crude oil producer, it remains deeply tethered to global markets.
  • The price collapse is hitting U.S. producers hard, with a suite of companies already announcing steep cuts in planned spending.

Go deeper: Coronavirus could lead to a wave of defaults for oil companies

Go deeper

The chaotic thaw in oil price wars

Illustration: Sarah Grillo/Axios

Friday morning brought the news that the OPEC+ group will meet remotely Monday to discuss potentially steep production curbs, sending prices upwards on the prospect of easing the global glut as coronavirus crushes demand.

Why it matters: The meeting, reported by multiple outlets, is the second concrete sign in two days of new coordinated efforts since the OPEC+ supply management alliance — led by megaproducers Saudi Arabia and Russia — collapsed a month ago.

The fallout from oil's collapse

Data: Yahoo Finance; Chart: Axios Visuals

ExxonMobil, citing an "unprecedented environment," said last night that it plans to "significantly" cut spending in light of the coronavirus and the collapse in oil prices.

Why it matters: The oil giant's announcement is the latest sign of how deeply the upended market is affecting the sector.

OPEC+ meeting reportedly delayed amid fresh Saudi-Russia split

OPEC. Photo: NurPhoto / Getty Images

A pivotal Monday meeting among oil-producing countries to discuss supply curbs is reportedly being delayed amid tensions between Saudi Arabia and Russia, the leading players in the OPEC+ group.

Why it matters: Travel and economic freezes from COVID-19 are causing an unprecedented drop in oil demand that has caused prices to crater.