Oil becomes a risky game for Saudis

The Wall Street Journal | Karen Elliott House: Lower prices put U.S. producers at a disadvantage, but they also cost Riyadh and imperil ties with the U.S.

President Trump is playing a tense poker game with Saudi Crown Prince Mohammed bin Salman. The stakes are America’s oil industry and the U.S.-Saudi alliance.

The 34-year-old prince and the president have been fast friends since Mr. Trump chose Saudi Arabia for his first foreign trip and received a lavish welcome. The president stood by the prince when he severed relations with Qatar, and again when he was accused of approving the murder of Jamal Khashoggi. But now the prince is threatening America’s oil industry, U.S. national security and Mr. Trump’s re-election prospects.

In March the crown prince flooded the market with oil to intimidate Russia into curbing its own oil production and shore up prices. His decision coincided with the Covid-19 crisis, which tipped economies into recession, sending oil prices plummeting. Mr. Trump quickly engaged, persuading Saudi Arabia, Russia and other oil producers in early April to cut production. The cuts proved too little, too late, as global consumption fell further.

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