CEO DATELINE - Energy groups urge Trump to avoid tariffs on imported oil
CEO DATELINE - Energy groups urge Trump to avoid tariffs on imported oil
- April 3, 2020 |
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Walt Williams
The CEOs of two oil industry associations are urging President Donald Trump to reject a proposal to impose tariffs on oil imports from Saudi Arabia, saying the measure would make an already bad situation worse.
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In recent weeks, Saudi Arabia has flooded markets with oil as part of a dispute with Russia over oil production in light of the COVID-19 pandemic, which has created a decline in demand. The result has been falling oil prices that threaten to devastate many U.S. oil and gas producers who cannot turn a profit with prices so low. (Oil prices rose Thursday after Trump floated the possibility that Saudi Arabia would be willing to negotiate an end to the dispute.)
Trump has reportedly considered imposing tariffs on Saudi oil imports to bolster U.S. producers. However, in an April 1 letter to the president, the heads of American Fuel & Petrochemical Manufacturers and the American Petroleum Institute urged against any such regulatory "meddling."
"Imposing supply constraints, such as quotas, tariffs, or bans on foreign crude oil would exacerbate this already difficult situation, jeopardize the short- and long-term competitiveness of our refining sector world-wide, and could jeopardize the benefits Americans experience as a result of our increasing energy dominance," AFPM CEO Chet Thompson and API CEO Mike Sommers said.
"Long-term, we know the U.S. refining sector is strong and will remain the most competitive in the world, but right now our sectors are facing headwinds that should not be made worse," they added.
Many refineries have announced reductions in output of 25% or more due to decreased demand related to COVID-19, the CEOs said. Trump plans to meet with oil executives Friday about the situation.
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