It would be unprecedented, but Senate Democrats want the Trump administration to send Energy Secretary Rick Perry to Vienna next month for an OPEC meeting.
• Senate Democrats think meeting will help price stability
• Analysts see meeting as long shot
• Perry appearance at Vienna seminar “plausible”
Perry should go to the June 22 meeting in Vienna “to personally communicate the importance of maintaining stable crude oil prices,” four senators wrote in a letter to President Trump Wednesday.
The letter, signed by Democratic senators Chuck Schumer of New York, Maria Cantwell of Washington, Robert Menendez of New Jersey and Edward Markey of Massachusetts, includes a list of requests to Trump, including pressing Saudi Arabia to increase oil production, all aimed at lowering domestic gasoline prices.
Trump is unlikely to even consider most of the requests, sources said, but could his recent focus on OPEC’s supply cut agreement and political pressure from Democrats on gasoline prices prompt the first-ever visit by a US energy secretary to an OPEC meeting?
“It’s pretty unlikely to me that they would even send Secretary Perry to Vienna,” said Jason Bordoff, a former energy policy adviser to former President Barack Obama and founding director of Columbia University’s Center on Global Energy Policy.
Bordoff said in previous administrations officials have pressed some OPEC ministers to consider the impact high energy prices may have on global economic growth.
In the spring of 2000, then-US Energy Secretary Bill Richardson urged Saudi Arabia through phone calls and what he called “quiet diplomacy” to orchestrate an OPEC production increase as the Clinton administration was worried about a crude oil price spike.
At the time, that price spike had brought prices to over $34/b.
“It’s a different OPEC,” Richardson said in an interview with S&P Global Platts in 2016, shortly after OPEC had invited US officials to join production freeze discussions. “Today, they’re not unified, there are more players and while the Saudis are still the leaders, they’re no longer as friendly to us as they used to be nor can they totally dictate [prices].”
Obama officials publicly ignored that 2016 invitation from OPEC and the US government had no role in the talks which led to the ongoing 1.8 million b/d supply cut deal between OPEC and 10 non-OPEC producers. The deal, which runs through the end of 2018, will be discussed at the June 22 meeting in Vienna.
But the deal has drawn Trump’s attention recently.
“Looks like OPEC is at it again,” Trump tweeted on April 20. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!”
Jamie Webster, senior director at Boston Consulting Group’s Center for Energy Impact, said it would be “very strange” for Secretary Perry to attend OPEC’s upcoming meeting. But, he said it was “entirely plausible” for Perry to attend OPEC’s International Seminar to be held over the two days before the meeting.
US oil executives, including ConocoPhillips CEO Ryan Lance, Hess CEO John Hess, Continental Resources CEO Harold Hamm, and Scott Sheffield, an executive chairman with Pioneer Natural Resources, are scheduled to attend that seminar.
DOE officials Thursday did not respond to questions about Perry possibly attending next month’s meeting or seminar. There has been no discussion of Perry travelling to Vienna, according to a DOE source.
Bob McNally, president of Rapidan Energy Group and energy adviser to former President George W. Bush, said a Perry appearance in Vienna is an extreme long shot.
“I’d be surprised if he would volunteer for that mission, not out of concern for US companies but because it would be humiliating and possibly counterproductive were he to do so,” McNally said. “OPEC decisions are made by consensus. While Perry (or President Trump) might convince Riyadh to increase production unilaterally, Iran or Venezuela could block Perry’s efforts to get OPEC to formally sanction higher quotas.”
If Perry did go to Vienna his message would be: “Increase production, now,” McNally said. But that message would not require a trip overseas, he said.
“If the administration wants more oil, it doesn’t need to send Secretary Perry to Vienna next month,” he said. “It needs to make four phone calls in the following order: Riyadh, Abu Dhabi, Kuwait and Moscow.”
Source: PlattsPrevious Next