As the collapse of the pact between Russia and Saudi Arabia remains unresolved, US President Donald Trump has now threatened to impose tariffs on oil imports to "protect" the country's workers. Trump stated on Saturday that he may be forced to implement the measure if Russia and Saudi Arabia don't agree to cooperatively stabilize global oil prices.
The US president told reporters that he will do whatever he needs to do to protect US oil companies and its tens of thousands of workers, which are now being threatened by the continually plummeting oil prices. Since the start of the coronavirus pandemic in January and the disagreement between Russia and Saudi Arabia over output controls, oil prices have dropped by more than 70 percent.
The collapse of the pact between two of the world's largest oil producers has resulted in an all-out war increase market share. Both countries have begun to ramp up production, flooding the market with supply despite the slump in demand caused by travel restrictions imposed by governments to mitigate the spread of the viral outbreak.
The United States recently became the world's largest oil producer, with its exports rivaling that or Russia and other members of the Organization of the Petroleum Exporting Countries (OPEC). The global oil collapse is now threatening US oil companies, which are facing potential bankruptcies resulting in the loss of thousands of jobs.
Trump reportedly met with industry leaders on Friday, discussing possible solutions to mitigate the effects of the oil price crash. The imposition of tariffs on oil imports was considered, but Trump told reporters that it will only be used if the country is "not treated fairly."
Some US companies, including the American Petroleum Institute and American Fuel & Petrochemical Manufacturers, have expressed concerns regarding the impact of the tariffs. The companies explained in a letter to the White House that tariffs would jeopardize domestic refiners as they do depend on oil imported overseas.
Trump reiterated that the proposed tariffs are likely not going to be needed as Saudi Arabia had told him that it has already reached an agreement with Russia to cooperatively reduce output to stabilize global oil prices.
Reports from sources within the OPEC seem to contradict Trump's statements, revealing that Russia and Saudi Arabia are still not in agreement. The OPEC meeting, which was scheduled to take place on Monday, reportedly had to be postponed over a new dispute between Russia and Saudi Arabia over who is to blame for crashing the global oil market. The meeting will reportedly be postponed to Saturday this week to allow for more time for negotiations.
