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Posted: 2020-04-09 21:55:00

It's not clear how advanced the effort is, as administration officials have been discussing how - and whether - to encourage other countries to prioritise US oil purchases. One of the people familiar with the matter said the administration has been actively courting foreign nations. The Energy Department didn't immediately respond to a request for comment.

Many barriers

There are plenty of logistical and financial barriers. The idea could face resistance from some large, multinational oil companies. And formal agreements might violate international trade rules. For now, the price of US oil isn't sufficiently discounted to support widespread exports.

Still, it's clear some oil producers see expanded trade as a solution to the crude glut. Occidental Petroleum Corp. has asked its employees to press lawmakers "for fair and open access for US-produced crude oil to Asian countries" including China, South Korea, India, Taiwan and Japan.

US pipelines and storage tanks are already filling up, raising the prospect that oil companies could soon be forced to halt or heavily curtail production. Even the prospect of a 10 million barrel per day cut in oil production - as tentatively agreed by Russia and Saudi Arabia on Thursday -- won't be enough to make up for lost demand.

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"We're going to be at tank tops at 40 days unless we get demand back up" no matter what Russia-Saudi deal is reached, said Mike McKenna, a former senior Trump administration official.

"It's not like you're going to be able to fill the Superdome with this stuff."

Bloomberg

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