WASHINGTON/HOUSTON (Reuters) – The Trump administration plans to send a special energy envoy to Saudi Arabia to work with the kingdom on stabilizing the global oil market, officials said on Friday, as the U.S. scrambles to deal with a price crash so deep that regulators in Texas considered curbing production there for the first time in nearly 50 years.
FILE PHOTO: U.S. President Donald Trump speaks with Saudi Arabia’s Crown Prince Mohammed bin Salman during family photo session with other leaders and attendees at the G20 leaders summit in Osaka, Japan, June 28, 2019. REUTERS/Kevin Lamarque/File Photo
Oil prices LCOc1CLc1 have lost more than half their value in the last two weeks as Saudi Arabia and Russia kicked off a price war and the coronavirus pandemic destroyed demand. U.S. oil now trades at less than $23 a barrel.
The crash has shocked the oil industry as a pact among OPEC and non-OPEC producers to cooperate imploded, triggering a production free-for-all.
The United States is sending a special representative to negotiate with Saudi Arabia, officials said Friday, after the kingdom unleashed production following years of touting its role as a stabilizing force for markets.
Saudi Arabia and Russia are locked in a war for global oil market share after their three-year deal to restrain output collapsed this month. The kingdom has vowed to increase production to a record 12.3 million barrels per day, and has chartered numerous tankers to ship oil around the world, pushing prices to near 20-year lows this week.
U.S. officials believe Saudi Arabia’s move to flood oil markets compounds the global economic crash during a cr