A top advisor to Donald Trump wants OPEC and Russia to limit their oil production and help jack up oil—and therefore gasoline—prices. The FT reports:
Mr Hamm, a billionaire pioneer of the North American shale boom who has been tipped as a potential energy secretary should Mr Trump win the US presidential election, said Opec and Russia should agree to freeze production when they meet this month to discuss ways to stabilise the market. […]
His comments mark a rare backing from someone advising a US presidential candidate for market intervention by Opec, which is still closely associated in the US with the Arab oil embargoes of the 1970s.
Delegates from the world’s petrostates are meeting at the International Energy Forum in Algiers at the end of the month, and there has been plenty of speculation that they’ll try to agree on a “freeze” deal on the sidelines of the summit that would effectively cap their collective supplies in the hopes of chipping away at the global glut that has depressed crude prices over the past 27 months.
It’s not clear that they’ll be successful, however, as OPEC these days is fractious at best and, let’s not forget, this same group convened in Doha back in April and failed to find common ground. But with Iranian oil production nearing pre-sanctions levels and some positive rhetoric coming out of Tehran, Riyadh, and Moscow, a freeze deal is looking likelier this time around.
That will delight petrostate regimes around the world, whose budgets have been pinched by bargain oil prices and whose leaders are becoming increasingly vocal about their fiscal discomfort. This is probably not, however, a policy move that Trump’s grassroots supporters will go for. There are very few Americans around who think that what the world needs is more Arab and Russian oil billionaires.
There is a group, however, that might welcome this kind of counsel: environmentalists. High gas prices means Americans drive less and consume less. Sadly, Greenpeace is unlikely to draw the appropriate conclusion and support Trump for President, but it’s possible that some of the big U.S. oil companies—who also like high oil prices—might begin to warm to the GOP nominee.