The Trump administration on Monday accused “state actors” of touching off an historic slump in global oil prices, and urged Russia’s ambassador to the United States to consider the importance of calming the markets.
Oil prices suffered their biggest daily rout since the 1991 Gulf War on Monday as top producers Russia and Saudi Arabia launched a price war in the face of weak demand prompted by the spread of the coronavirus.
“These attempts by state actors to manipulate and shock oil markets reinforce the importance of the role of the United States as a reliable energy supplier to partners and allies around the world,” U.S. Energy Department spokeswoman Shaylyn Hynes said in a statement.
The department did not name any country, but said it was watching the fallout from last week’s meeting in which a three-year pact between Russia and Saudi Arabia, the top producer in the Organization of the Petroleum Exporting Countries, collapsed after Russia declined to follow OPEC’s lead in cutting output.
U.S. Treasury Secretary Steven Mnuchin “emphasized the importance of orderly energy markets” in a previously scheduled meeting on Monday with Russian Ambassador Anatoly Antonov, the Treasury said in a statement.
Mnuchin’s pleas could face an obstacle after the Trump administration last month slapped sanctions on a subsidiary of Russian state oil major Rosneft that it says provides a lifeline to Venezuela’s President Nicolas Maduro.
The United States and most other Western countries consider Maduro’s 2018 election a sham.
But Russia, which has boosted operations in Venezuela as the country faces an economic crisis, believes it is unfair to penalize Russian companies without also placing sanctions on U.S. companies that have operations in the South American country, including Chevron Corp (CVX.N).
The market rout poses a threat to the bustling U.S. drilling industry, an important segment of the U.S. economy that has made the country into the world’s largest producer of oil and gas and reversed its historic role as a proponent of low energy prices.
The plunge could push many U.S. producers, some of whom have already been hit by near-record low natural gas prices, into bankruptcy.
The oil and gas industry downplayed the effect of the oil price drop on U.S. producers, however.
Mike Sommers, the head of the American Petroleum Institute industry group, said efficiency advances brought about during the U.S. shale revolution are protecting American drillers from gyrations in global oil markets.
“U.S. producers today are more efficient and more productive than they have ever been and their investments are for the long term,” Sommers told reporters in a teleconference.
Sommers acknowledged that producers cannot be entirely shielded from global market forces, however.
Energy Secretary Dan Brouillette on Monday directed his department to determine whether a scheduled sale of 12 million barrels of oil from the U.S. Strategic Petroleum Reserve should take place this month, the DOE said.
The department had announced the sale on Feb. 28 in compliance with a 2015 law that ordered occasional sales to help pay for government programs.
President Donald Trump, who is seeking reelection in November, tried to put a silver lining on the oil price drop.
“Good for the consumer, gasoline prices coming down!” he wrote.