US-Saudi alliance one of 'many ideas' being discussed

Forging an oil alliance between the United States and OPEC’s top producer Saudi Arabia is one of “many, many ideas” being floated by US policymakers but it is uncertain whether it will become a formal proposal, the US energy secretary told Bloomberg TV on Monday.

“I don’t know that that’s going to be presented in any formal way … as part of the public policy process,” Energy Secretary Dan Brouillette told Bloomberg. He said no decisions have been made on “anything of that nature.” Bloomberg News interview with US Energy Secretary.

The Wall Street Journal said in a report on Friday that officials at the Energy Department were seeking to convince the Trump administration to push Saudi Arabia to quit the Organisation of the Petroleum Exporting Countries and work with the United States to stabilise prices.

READ: Trump says he will enter Saudi-Russia oil fray at appropriate time

Oil prices have dropped more than half in the last two weeks as Saudi Arabia and Russia launched a price war and the coronavirus pandemic destroyed demand. US crude oil was trading around $22 a barrel on Monday, after tumbling 29% last week in its steepest slide since the outset of the US-Iraq Gulf War in 1991.

A source with knowledge of talks between the Energy Department told Reuters on Monday that those officials had not been closely involved in talks between the department and the White House on how to stabilize energy markets.

The Trump administration will soon send a special energy representative to Saudi Arabia from the Energy Department for months at least to improve talks between the two countries. As the world’s largest oil exporter, Saudi Arabia has long led the production group’s efforts to stabilise oil prices in the past, usually by reeling in production.

Brouillette told Bloomberg TV that the Trump administration would at some point engage in a diplomatic effort on oil markets. Brouillette said he would work with Secretary of State Mike Pompeo and other officials on that push.

READ: Oil prices show sharpest weekly decline since 2008