US Politicians Cautiously Welcome Oil Deal

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US politicians, including President Donald Trump, lauded the Opec-plus production deal as a win for the US oil industry and the people who work in it but warned they would be closely watching for compliance. Washington had been pushing Saudi Arabia to arrange and enforce a production cut among the members of the Opec-plus coalition, seeing it as critical to protect jobs in the US oil patch. Ostensibly the cut was a coup for the sector, with 23 Opec-plus nations pledging to keep 9.7 million barrels per day off the market in May and June and continued phases of production curtailment over the next two years (IOD Apr.12'20). Reality is more mixed, with layoffs, bankruptcies and slowed activity awaiting the US oil industry regardless, even if the magnitude of the pain has been lessened. In fact, Trump has repeatedly flagged that the US will support the deal -- including by picking up 300,000 b/d in cuts Mexico refused to take -- via market-driven declines that will significantly impair domestic output. "I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia. I just spoke to them from the Oval Office," the president tweeted on Sunday. "Great deal for all!" Senator Kevin Cramer from North Dakota praised Trump's leadership in helping broker the agreement. "That's what sealed this unprecedented deal," he said Sunday. "Without it, the US could've lost its energy dominance along with the security and thousands of good-paying jobs it brings." Cramer was part of a roughly two-hour phone call Saturday that included 11 senators and Saudi Arabia’s energy minister, deputy defense minister and ambassador to the US. Along with Alaska Republican Dan Sullivan, Cramer had floated the idea of removing US troops from the region if Saudi Arabia did not deliver the Opec-plus agreement, threatening to upend the nations' delicate alliance (related). Their current rhetoric reflects continued caution alongside optimism over the deal. "Actions will speak louder than words on the implementation of this agreement," Sullivan said, adding that the US will be "watching closely." Both Sullivan and Cramer have seen energy firms working in their states rapidly come under duress by the simultaneous crush of coronavirus-driven demand destruction and the flood of cheap oil put on the market by Saudi Arabia and others following the collapse of a previous Opec-plus production agreement last month (OD Mar.11'20). They were hopeful Sunday's production agreement would help, even if the US industry is hardly out of the woods. "It is my hope that this deal will bring much-needed stability to energy markets in Alaska and throughout our country and will halt further job losses in our oil and gas sector," Sullivan said. US-Saudi relations have been under mounting stress in recent years following the killing of Saudi journalist Jamal Khashoggi and amid US President Donald Trump's wider desire to disengage from the Middle East. At the same time, the US oil industry has risen to grab global market share, putting the interests of the two nations into competition. Deon Daugherty, Houston, with Emily Meredith, Washington

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