Oil falls as Trump urges OPEC to lower prices
President Donald Trump said he would ask Saudi Arabia and other OPEC countries to “bring down the price of oil” and doubled down on his threat to use tariffs.
Addressing officials at the World Economic Forum in Davos on Thursday, the US President said he was ‘surprised’ OPEC did not lower oil prices ahead of the election.
“The cost right now is so high that the war will continue,” he said, referring to the Russia-Ukraine war.
He said, “You have to lower the price of oil, that will end that war. You can end that war.”
The President’s comments on oil prices came after He spoke to Saudi Crown Prince Mohammed bin Salman on WednesdayBin Salman pledged to invest up to $600 billion in the US over the next four years, according to Saudi state media, although the figure was not mentioned in a White House statement after the call.
Despite the cordial exchange, Trump said he would “ask the Crown Prince, who is a wonderful man, to increase it to about $1tn”.
Crude oil prices fell 1% after Trump’s comments.
According to David Oxley, chief climate and commodity economist at Capital Economics, these comments are in keeping with Trump’s desire to lower gasoline prices.
“[It]is their clear intention to use energy as leverage on Russia to end the war in Ukraine. Low oil prices will certainly encourage American oil producers to “drill, baby, drill,” he said. “Especially in high-cost Alaska.”
“Of course, Saudi Arabia will not be guaranteed to heed President Trump’s request to expand oil production and drive down global oil prices.”
The US President’s appearance via video at the World Economic Forum was his first address to a global audience since his inauguration earlier this week.
He used the platform to insist that companies around the world manufacture their products in the US or face heavy tariffs on imported goods entering the US market.
The president also said he would seek an immediate drop in interest rates, which he said had led to deep deficits and resulted in what he described as an economic disaster under his predecessor, President Joe Biden.
“This starts with confronting the economic chaos caused by the failed policies of the previous administration,” he said.
“Over the past four years, our government has spent $8 trillion in wasteful spending and harmed the country with energy restrictions, burdensome regulations, and hidden taxes like never before.”
Trump also talked about “good, clean, coal” to power the data centers needed for artificial intelligence. “We need twice as much energy as we currently have in the U.S. for AI to be as big as we want it to be,” he said, adding that he would use emergency orders to speed up the construction of new power plants.
“Nothing can destroy coal – not weather, not bombs, not nothing,” Trump said.
