Trump’s Inaction Makes Oil Market Management Harder
Whatever happens with the pandemic, an oil output deal that doesn't include the world's biggest producer makes it even harder to do.
Getting Texas drilling again will cause problems for OPEC.
Photographer: Brittany Sowacke/Bloomberg
The unprecedented OPEC+ deal in April, which led to drastic output cuts, is now entering its most dangerous phase, with oil demand and prices recovering. At the time, President Donald Trump claimed credit for the breakthrough, even though the U.S., the world’s biggest oil producer, wasn’t part of the agreement. Now the American president could play a pivotal role in its fate, not by calling the leaders of Saudi Arabia and Russia, but by acting decisively — or failing to act — to contain a resurgence of the Covid-19 outbreak in the U.S.
A second surge in virus cases, mostly in Sun Belt states, could undermine the recovery in U.S. oil demand if people curtail travel and leisure or if lockdowns are reimposed. It could even hit supply, if the growing number of cases in Texas leads to renewed restrictions on oilfield activities.