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President Trump inched closer to supporting tariffs on oil imports on Saturday as one way to help the industry in historic turmoil over rock-bottom prices.
Why it matters: More than 70 oil companies could go bankrupt in the coming months, consultancy Rystad Energy said Friday, if U.S. oil prices are around $30 a barrel — which is above where they’ve been lately.
Driving the news: “If I have to do tariffs on oil coming from outside or something to protect tens of thousands of energy workers in our great companies that produce these jobs, I will do what I have to do,” Trump said at Saturday’s briefing.
Between the lines: His comments represent a shift toward supporting such a move, one of the more aggressive steps the government could take, compared to Friday’s briefing.
The big picture: As the coronavirus pandemic threatens lives around the world, it’s shutting down a global economy driven by oil consumption. This, along with a related price war between Saudi Arabia and Russia, is sending oil prices into a tailspin and producers are scrambling to stay afloat.
- Trump and his administration have been prodding Saudi and Russian officials to strike a deal to cut production and raise prices.
The intrigue: While all oil companies are suffering under cheap prices, bigger producers don’t support tariffs or other measures where the government would directly intervene in oil markets. Officials regulating the sector are also hesitant.
- Ryan Sitton, a commissioner of the Texas Railroad Commission, which regulates the state’s oil production, said he doesn’t support tariffs.
- “My hope is that we don’t get to that, my hope is that the market gets balanced through good leadership on behalf of major oil producers,” said Sitton, referring to the U.S. (mainly Texas) and Saudi Arabia and Russia.
What we’re watching: Canada is in discussions with the U.S. about the possibility of tariffs on Saudi and Russian oil if the two countries don’t quickly reach a deal on a price war, the Financial Times reported earlier Saturday.
Go deeper: Trump reluctant to intervene in oil markets