- The threat to stop the strategic alliance is reported to have been central to the White House pressure campaign.
- MBS was reportedly so surprised by the pronouncement that he ordered his advisors out of the room to proceed with the negotiations in private.
- A flotilla of Saudi oil tankers is reportedly stranded in international waters following the abrupt agreement.
US President Donald Trump allegedly gave the Saudi administration an ultimatum to stop the infamous price war with Russia. On April 2, Trump apparently made a phone call to Saudi Crown Prince Mohammed bin Salman (MBS), letting him know that unless the Organization of the Petroleum Exporting Countries (OPEC) cut oil production, he would allow lawmakers to go ahead and legislate a US troop withdrawal from the kingdom.
This is according to sources who spoke to Reuters. The threat to stop the strategic alliance is reported to have been central to the White House pressure campaign. It led to the kingdom cutting oil supply, and is believed to have been a crucial diplomatic victory for the president.
Trump is said to have delivered the message about ten days before the commencement of production cuts. MBS was reportedly so surprised by the pronouncement that he ordered his advisors out of the room to proceed with the negotiations in private. The move highlighted Trump’s resolve to protect American industries at a time when the oil sector was experiencing a historic price meltdown.
According to a US White House official, Trump essentially conveyed to the Saudi leaders the message that, “we are defending your industry while you’re destroying ours.” When asked about the move, Trump has denied making such a declaration, stating:
“I didn’t have to tell him. I thought he and President Putin, Vladimir Putin, were very reasonable. They knew they had a problem, and then this happened. They were having a hard time making a deal. And I met telephonically with him, and we were able to reach a deal.”
Saudi Arabian officials have yet to comment on the phone call. An unnamed insider has, however, said that the deal did not only include Saudi Arabia but all OPEC countries. “Saudi Arabia, the United States and Russia have played an important role in the OPEC+ oil cut agreement, but without the cooperation of the 23 countries who took part in the agreement, it would not have happened,” he said.
Saudi Supertankers Stranded
A flotilla of Saudi oil tankers is reportedly stranded in international waters following the abrupt agreement. They had been sent off soon after Saudi Arabia moved to flood markets with cheap oil, following the collapse of the OPEC+ oil deal in March. According to a senior Saudi Aramco official, you can’t always sustain supply because buyers can’t exceed their storage capacity.
“The fact is buyers don’t have storage so regardless of whatever level of output you want, there won’t be storage for it.” He highlighted this as one of the main reasons why the government chose to shut down production. Supply had exceeded demand by a considerable margin.