Report: Trump threatened to cut US military support to Saudi Arabia to secure oil output slash

A dramatic price decline that followed threatened to bring down the US shale oil industry, which operates at a higher profit margin than the Saudi industry; two weeks after the threat OPEC announced it will reduce production

Reuters|

US President Donald Trump leveraged US military assistance to Saudi Arabia to force Riyadh to set up the international deal providing for a large-scale crude output cut, Reuters reported Thursday.

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  • According to the agency, a phone call between Trump and Saudi Crown Prince Mohammed bin Salman on April 2 saw the former state that if the Saudi-led oil producers' alliance does not close the taps, he will not be able to push hold the lawmakers back from legislating restrictions on US-Saudi military cooperation.
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    מתקני חברת ערמקו בסעודיה
    מתקני חברת ערמקו בסעודיה
    Saudi Aramco oil facility
    (Photo: Reuters)
    Those, he warned, might go as far as to prompt a US withdrawal from the country in what could be an end for a decades-lost alliance between Washington and Riyadh.
    As per one of the four sources cited by the agency, the prince found the threat so shocking that he told his assistants to leave the room to continue the conversation with more privacy.
    Less than two weeks after the phone conversation, the Organization of the Petroleum Exporting Countries announced it had reached a deal with Russia that set the stage for a dramatic reduction in output.
    The deal came at a time when the global market was oversaturated as the COVID-19 pandemic and the restrictions imposed to contain it cut into the demand.
    The dramatic price decline that followed threatened to bring down the US shale oil industry, which operates at a higher profit margin than the Saudi industry.
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