Updates with changes throughout
President Donald Trump is not considering putting tariffs on imported crude now but warns they remain an option if the US is not "treated fairly."
Trump made the remarks hours after meeting with oil executives in the White House. Those industry executives largely oppose putting tariffs on imports, which some lawmakers and shale producers have proposed as a way to protect domestic producers from an incoming wave of increased Saudi Arabian production.
"Am I thinking about imposing [tariffs] as of this moment? No. But if we are not treated fairly it is certainly a tool in the toolbox," Trump said.
Trump earlier this week said he was considering a "tough" option if Saudi Arabia and Russia were unable to reach an agreement to cut oil production, after the collapse of the Opec+ production restraint deal nearly a month ago. Trump is now optimistic the two countries will work something out. "They want to get it resolved, Russia and Saudi Arabia," Trump said.
Trump today also suggested that, aside from potential Opec+ cuts, it would largely be up to producers to deal with an "overabundance" of oil supplies primarily by a collapse in demand stemming from the coronavirus outbreak. US officials have downplayed the idea of ordering oil producers to cut output.
"There is too much oil, there is a glut, and these are great companies and they will figure it out," Trump told reporters after the meeting. "It is a free market, we will figure it out."
Those remarks could be reassuring to US oil companies that oppose large government interventions such as requiring producers to cut output or banning foreign oil imports. US trade group the American Petroleum Institute, whose chief executive attended today, said it urged the administration to avoid US policies "that could do more harm than good."
Trump at the executives meeting earlier today said he wants to find new "very big" locations to stash surplus crude as a way to keep oil workers employed. He ordered US energy secretary Dan Brouillette to "check out" other areas to store oil, including areas that are "very big" and larger than existing storage facilities.
"You would think you would want to fill up every cavity that we have in this country," Trump said. "At these prices it would be good, it would keep everybody working."
It is unclear how seriously Trump is considering the idea of finding new areas to store oil outside of the federal government's main storage facilities that make up the US Strategic Petroleum Reserve, which has about 77mn bl of spare capacity that will soon be leased to industry. Trump has discussed oil storage publicly at least four times this week.
The use of tankers to store crude is growing globally while onshore companies are eyeing the use of rail cars and even pipelines to store crude.
US oil executives at the meeting largely praised Trump as television cameras rolled.
US independent Continental Resources executive chairman Harold Hamm thanked Trump for his "friendship" with Saudi crown prince Mohammad bin Salman and Russian president Vladimir Putin. "I know those [relationships] have not been easy sometimes, but at this time it was particularly needed," he said.
