OPEC shrugs off Trump threat

London - OPEC’s two biggest suppliers to the US shrugged

off a vow by President Donald Trump to end dependence on the group’s oil,

saying the world’s biggest economy would continue to need crude from abroad.

The US is “closely integrated in the global energy market,”

Saudi Arabia’s Energy and Industry Minister Khalid Al-Falih said, while his

Venezuelan counterpart Nelson Martinez said he expects his country’s crude

exports to the world’s top consumer to remain stable.

“The positions that the US and Saudi Arabia take in

global energy are very important for global economic stability,” Al-Falih said

Sunday at a meeting of producing countries in Vienna. He added that Saudi

Arabia was looking forward to working with the Trump administration.

Just after his inauguration on Friday, Trump said he was

“committed to achieving energy independence from the OPEC cartel and any

nations hostile to our interests,” by exploiting “vast untapped domestic energy

reserves”, according to a plan posted on the White House website. The US

imported about 3 million barrels a day from the organization last year, with

Saudi Arabia and Venezuela accounting for 1.81 million, according to data

compiled by Bloomberg.

This isn’t the first time a US president promises to

end the country’s reliance on supplies from the Organization of Petroleum

Exporting Countries. Former President George W. Bush promised to cut imports

from the Middle East when he said in 2006 the nation was “addicted to oil.”

Shipments from OPEC rose 10 percent during Bush’s time in office. Every U.S.

president going back to Richard Nixon has pledged to reduce the country’s

reliance on foreign oil.

‘Everyone’s good’

Venezuela’s Martinez played down any concern that his

country’s shipments to the US might dwindle under a Trump administration. “The

export volumes will be maintained,” he said. “There is a lot of interdependence

in the world of energy. It’s good to maintain it for everyone’s good.”

Saudi Arabia exported an average of 1.08 million barrels

a day of crude to the US in 2016, while Venezuela shipped about 733 000 barrels

a day and Iraq some 400 000 barrels a day, according to data compiled by

Bloomberg.

Read also:  Africa may push OPEC back to the drawing board

OPEC is waiting for a new US energy secretary to take

office to learn more about Trump’s energy policies, Mohammad Barkindo, the

group’s secretary-general, said Sunday in the Austrian capital.

The US is benefiting from the price increase following

OPEC’s December agreement with other producers to reduce oil output, according

to Algeria, another member of the group. “OPEC is currently helping the US,”

Noureddine Boutarfa said Saturday in an interview in Vienna. “The price

recovery is helping US companies, the US industry, the US economy.”

Crude prices rose to an 18-month high of more than $58 a

barrel after OPEC and several non-members agreed to end two years of unlimited

production and instead cut output. Prices have since slipped about 5 percent

from that peak as traders await proof that the producers will follow through.

Benchmark Brent crude was down 0.1 percent in London at

$55.43 a barrel at 6:59 a.m. local time, after rising 2.9 percent over the

previous two sessions.

Even as Trump commits to ending US reliance on OPEC’s

oil, the new administration said it would “work with our Gulf allies to develop

a positive energy relationship as part of our anti-terrorism strategy.”

Al-Falih suggested Saudi Arabia could always export

its oil somewhere else, if the US stopped buying. 

“Oil is fungible, so it flows around - what doesn’t get

sold in one market can be sold in another,” he said.

BLOOMBERG