‘This is the American energy producers’ Pearl Harbor…’
In response, Sen. Kevin Cramer, R-N.D., urged President Donald Trump to stop all Saudi tankers from further unloading oil in the United States.
Cramer tweeted that the Arab sultanate was responsible for flooding the market, driving the price down while devastating America’s own industry during an already dire time.
The incoming Saudi tankers are going to make a dire situation worse.
The supply glut is Saudi Arabia’s fault, let’s not force American oil producers to suffer for it.@realDonaldTrump shouldn’t let these tankers unload on our soil.
America first! https://t.co/jkPss6XeLc
— Sen. Kevin Cramer (@SenKevinCramer) April 18, 2020
Ironically, while lower gas prices are generally a boon for helping drive commerce, the current statewide shelter orders in most areas mean few can take advantage of them.
Historically, the U.S. has been beholden to the oil-rich nation for its energy supply, but the oil independence achieved during the Trump administration has resulted in a more fraught relationship, with greater scrutiny on its alleged human-rights abuses.
The Saudi strategy involves increasing its global market share by selling cheap oil and crushing U.S. competition by making financial losses unsustainable.
Worse, Saudi Arabia is selling cheap oil to U.S. companies.
“Shame on companies for rewarding bad behavior by taking this crude as US oil producers suffer,” said Cramer.
In 2018, the United States became the world’s largest oil exporter thanks in no small part to the shale revolution in Cramer’s home state of North Dakota. But as the Wuhan virus slowdown hit the U.S., Saudi Arabia and Russia ramped up oil production in an aggressive attempt to cripple American oil producers.
In January, Saudi Arabia increased its oil output by seven-times its January 2019 production total. Then, Saudi exports to the U.S. more than doubled from February to March, according to TankerTrackers.com.
On Monday afternoon, U.S. oil futures sunk well-below zero to negative $37 per barrel.
Now, the Persian Gulf oil hegemon is sending a flotilla of 20 supertankers loaded with tens of millions of barrels of oil to ports in Louisiana and Texas.
“This is the American energy producers’ Pearl Harbor,” said Kirk Edwards, president of West Texas oil company Latigo Petroleum LLC, in the Wall Street Journal on Friday.
“We know the ships are coming in, and yet nobody is doing anything about it,” Edwards said. “Every barrel they’re bringing in on those ships backs out a barrel of oil produced here in the Permian Basin.”
Cramer says he has a solution to the economic war flotilla.
For over a month he’s been clamoring for President Trump to use “232 authority” of the Trade Expansion Act to embargo oil imports from Saudi Arabia, Russia, and other oil- and petroleum-exporting nations like Iraq.
“The U.S. has a long history of taking action against oil market manipulations by state actors,” Cramer wrote on March 18. “While I support continued dialogue, I believe it is critical to take action now to avoid substantial domestic layoffs, displacement, and financial impacts.”
More recently, Cramer raised the issue of tariffs, saying, “the Kingdom cannot flood the market then expect us to fix it.”
Low prices have been “extremely brutal” for North Dakota’s oil industry, according to the state’s petroleum council.
Many companies have cut workers’ hours and layoffs are expected to compound the existing economic devastation wrought by the Wuhan virus shutdown.
On Tuesday afternoon, Kramer said he was working with other lawmakers to prevent banks from seizing oil and gas companies in North Dakota that have fallen behind on loans.
KX EXCLUSIVE: Major U.S. banks are preparing to seize oil & gas companies in N.D. to avoid losses on loans to energy companies that may go bankrupt. Sen. Kevin Cramer explained the work he & other lawmakers are doing to avoid this scenario. https://t.co/fh6DddXyMP
— KX News (@KXMB) April 21, 2020