25/01/2025
25/01/2025
WASHINGTON, Jan 25, (AP): US President Donald Trump is emphasizing that targeting Russia's oil revenue is the best way to get Moscow to end its nearly three-year war against Ukraine. Trump, who pledged in the campaign that he'd broker a quick end to the grinding conflict, in his first days in office has leaned in on the idea that OPEC+, the alliance of oil producing nations, holds the key to ending the war by reducing oil prices.
The president on Friday renewed his call on the group of oil producing exporters, led by Saudi Arabia, to reduce the price of oil. It's a move he says would bleed Russia of much needed revenue to pay for the conflict and force Vladimir Putin to reconsider the war. "One way to stop it quickly is for OPEC to stop making so much money," Trump told reporters. "So, OPEC ought to get on the ball and drop the price of oil. And that war will stop right away.”
But the push on OPEC+ is an uphill battle, according to industry experts. The alliance last month put off increasing oil production as it faces weaker than expected demand and competing production from non-allied countries. Trump made similar calls on OPEC+ this week during a virtual address to the World Economic Forum in Davos, Switzerland, the annual gathering of world leaders and corporate elites.
Meanwhile, the president's special envoy to Ukraine and Russia, Keith Kellogg, said Friday that OPEC+ cutting oil prices to $45 per barrel could push Russia to end the war. "Russia is gaining billions of dollars of money from oil sales,” Kellogg said in a Fox News interview. "What if you drop that to $45 a barrel, which is basically a baseline break-even point?” The Saudi and Russian relationship is complicated, though the countries have cooperated on oil.
In 2016, Russia and other oil producers that weren’t part of the alliance joined with Saudi Arabia and other members of the oil cartel to form OPEC+. Russia and Saudi Arabia are by far the biggest producers in the expanded alliance. That move was largely made in response to dramatically falling oil prices due to US shale oil output.
The United States is not a member of OPEC or OPEC+. Patrick De Haan, head of petroleum analysis at GasBuddy, said Trump has a better relationship with Saudi Arabia’s crown prince, Mohammad bin Salman, than did his predecessor, Democrat Joe Biden. Still, he said, the Saudis "still have bills to pay,” and Trump is making a "huge ask.” "Oil companies respond to economics and not to personal favors,” he added.