The cost of oil globally is at a decades-long low. Supply far outweighs the demand, and oil companies are essentially having to pay buyers to take it off their hands as oil storage terminals are being filled to capacity. With the Coronavirus pandemic shutting down economies world-wide, this trillion-dollar industry is reeling. The price of US oil recently dropped below zero for the first time in history.
With future oil speculations not necessarily being tied to the right or the left, there are undoubtedly differing opinions amongst analysts and leaders as to what the outcome will be. Senior marketing analyst with OANDA said, “There is nothing to make energy traders believe that storage constraints, rising inventories, and demand concerns will be alleviated.” Global head of energy for KPMG told Yahoo Finance that she finds it hard to be optimistic about oil prices even leading into 2021. The co-chair of the energy practice at the Haynes and Boone law firm said that his optimistic prediction for the oil industry is “only” 100 bankruptcies.
Others seem more optimistic. Enbridge Inc., an operator for Cushing, one of the biggest oil storage facilities in the world, predicts that the imbalance will be “temporary” and that “balance will be restored to the market in the long term.” An analyst with Goldman Sachs agrees that oil prices will be unstable for the near future but will ultimately level out again soon as oil companies shut-up wells and cut production.
The state of Texas, the largest oil producer in the US., has said they will not cut production. The Railroad Commission of Texas which oversees their state’s oil industry has instead said their team is researching ways to help the industry during this unprecedented time. In a Tweet posted by President Trump, he wrote “We will never let the great U.S. Oil & Gas Industry down,” noting that he has ordered a plan to release funds to the oil and gas industry.
We will never let the great U.S. Oil & Gas Industry down. I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!— Donald J. Trump (@realDonaldTrump) April 21, 2020
Although, there isn’t too much current divide on the simple fact of oil prices; the thoughts from the left are pro-regulation and pro taxation.
“The most sustainable option, once the current crisis passes, would be an aggressive return to the strategy that tamed OPEC in the early ’80s — conservation — via gas taxes and other forms of carbon pricing. As both the biggest producer of crude oil and the biggest consumer, the United States has a conflicted national interest. The one thing we can’t allow is for the likes of MBS and Putin to exploit it.”
Charles Lane, Washington Post
Conversely, oil thoughts on the right have been primarily about the importance of the oil industry in the US to uncouple our international dependence.
“For decades, the United States was actively involved in the Middle East, in part because the region has been a primary exporter of oil to the United States… Keeping the supply of oil safe and uninterrupted is the reason why there are so many American troops in Saudi Arabia and other Arab countries, as well as aircraft carrier groups in the Persian Gulf… Democratic presidential hopefuls, including Bernie Sanders and Joe Biden, and President Donald Trump, have long-since declared the need to disentangle the United States from the Middle East, and end America’s ‘forever wars.’ But geopolitical decoupling cannot be pursued without energy independence, which, in turn, cannot be attained when the U.S. shale industry is on the brink of destruction.”
Sukhayl Niyazov, Human Events