President Trump is set to meet Friday with the heads of some of the largest U.S. oil companies to discuss measures to help the industry weather an unprecedented oil crash, people familiar with the matter said.
But the options are limited for Washington to help beleaguered U.S. oil-and- gas producers, and there are strong differences between major oil companies and some independent shale drillers about whether aggressive government actions are even necessary, making the prospect of any agreement challenging, some of the people said.
Mr. Trump is unlikely to endorse direct federal aid or market interventions during Friday’s meeting, according to a senior U.S. official, but may consider smaller actions including a waiver of a law that requires American vessels be used to transport goods, including oil, between U.S. ports. The president wants to show support, even if policy opinions are limited for now, the official said.
The U.S. oil-and-gas industry has been pummeled recently by the dual shock of plummeting oil demand because of the coronavirus pandemic and surging supply as Russia and Saudi Arabia are locked in a price war and flood the market with crude. Oil prices plunged this week to just above $20 a barrel, the lowest level in nearly two decades.
Mr. Hamm, a fracking pioneer who founded Continental, has called for the Trump administration to intervene in the Saudi-Russian price war, potentially putting tariffs on oil imports from the countries, while other shale companies have called on state regulators to enforce mandatory production cuts in Texas.
But Exxon, Chevron and other large companies don’t support any intervention in oil and gas markets, which they plan to express to the president during the meeting, some of the people familiar with the matter said.
While many inside and outside the Trump administration are skeptical that Friday’s talks will result in action, one potential area of assistance could be a temporary waiver of the Jones Act, which would allow more ships to transport oil around the U.S.
Such a waiver would allow U.S. oil to be shipped from the petrochemical hub on the Gulf Coast to markets on the East Coast and Washington state, which are currently being flooded with imports from Saudi Arabia and Russia. The U.S. has previously granted such waivers, typically for about 10 days, during other emergencies.
The idea is more broadly supported by oil companies, but ship-builders and trade unions, also important to the president, will likely oppose it, analysts and lobbyists said.