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The Trump administration is not planning specific financial aid to beleaguered oil producers, Energy Secretary Dan Brouillette told Axios Wednesday.
Driving the news: The administration has taken a few narrow steps. But rumors have been rampant that the government was planning a drastic move ever since President Trump tweeted on April 21 that he ordered Brouillette and Treasury Secretary Steven Mnuchin to "formulate a plan which will make funds" available to the sector.
What they're saying: “For the time being, the first steps we’ve taken are going to be what we do. I’m not anticipating any broad strokes here beyond what we’ve already done,” Brouillette said. “We’re not contemplating, as I sit here today, a specific second or third step. It may come if the results of the plan aren’t panning out the way we had hoped.”
The big picture: Nearly all facets of the economy are struggling as Americans have stayed home for weeks in response to the coronavirus pandemic. The oil industry has been facing the one-two punch of cratering demand and an early-March price war between Saudi Arabia and Russia.
Catch up quick: Here’s what the Trump administration has done to help the industry:
- The Federal Reserve changed the rules to its new lending program on April 30 in a way that allows oil companies to qualify for the aid, a move Brouillette told Bloomberg TV on Tuesday came at least partly at the behest of the administration.
- The Energy Department is allowing oil companies to store excess oil in the nation’s strategic reserves.
- Trump and other officials across his administration were pushing Saudi Arabia, other members of the oil group OPEC, and Russia to broker across-the-board cuts in mid-April to help stabilize an imploding oil market.
Where it stands: Those cuts, along with the natural balancing of supply and demand in the market, have helped stabilize oil prices. U.S. oil prices briefly went negative on April 20, but since then both U.S. and global oil prices have been hovering around $20–$30 a barrel.
Flashback: Brouillette’s comments confirm what Politico reported last week — that as oil prices stabilized, the administration’s focus on helping the sector has waned.
What we’re watching: Brouillette praised comments made recently by House Majority Leader Steny Hoyer (D-Md.) that support the government buying oil to fill the strategic reserve, per Politico. This move is more significant than the Energy Department allowing companies to temporarily store oil there.
- “We think those are positive steps,” Brouillette said of Hoyer’s comments. “I do think there is growing support for funding purchases for oil to put in the Strategic Petroleum Reserve.”