Trump Urges OPEC to Slash Oil Prices Amid Global Energy Concerns

Source: www.brookings.edu/

Trump’s Call for Lower Oil Prices

Trump expressed surprise that OPEC had not reduced oil prices before the elections, suggesting that high crude prices were indirectly funding the Russia-Ukraine conflict. "Right now, the price is high enough that that war will continue," he said. "You gotta bring down the oil price. That will end that war."

His remarks followed a conversation with Saudi Crown Prince Mohammed bin Salman, who pledged to invest up to $600 billion in the U.S. over the next four years. However, Trump hinted at pushing for even greater investments, saying, "I’ll be asking the Crown Prince, who's a fantastic guy, to round it out to around $1 trillion."

Impact on Global Oil Markets

Following Trump’s speech, crude oil prices fell by 1%. Analysts noted that his comments align with his long-standing desire for lower gasoline prices and his use of energy as a geopolitical tool. David Oxley, chief climate and commodities economist at Capital Economics, said, "Lower oil prices will certainly not incentivize U.S. oil producers to 'drill, baby, drill' – particularly in high-cost Alaska."

OPEC, a cartel of 12 oil-producing nations, aims to stabilize global oil prices. However, Saudi Arabia’s response to Trump’s request remains uncertain. "Saudi Arabia would not be guaranteed to heed a request by President Trump to expand oil production," Oxley added.

Trump’s Broader Economic Agenda

During his Davos address, Trump also emphasized his commitment to protecting U.S. industries through tariffs. He warned global companies to manufacture their products in the U.S. or face steep tariffs on imports. "We’re looking for fair trade," he said, drawing mixed reactions from the audience.

Trump also criticized the economic policies of his predecessor, President Joe Biden, blaming them for $8 trillion in deficit spending and "nation-wrecking energy restrictions." He called for an immediate drop in interest rates, though such decisions are made independently by the U.S. Federal Reserve.

Focus on Energy and AI

Trump highlighted the importance of energy in powering the future of artificial intelligence (AI). He announced that several firms, including OpenAI, would invest $500 billion to build AI infrastructure in the U.S. "We need double the energy we currently have for AI to be as big as we want it to be," he said.

He also championed the use of "good, clean coal" to meet the growing energy demands of data centers. "Nothing can destroy coal – not the weather, not a bomb, nothing," Trump declared, vowing to expedite the construction of new power plants through emergency decrees.

Global Reactions

Trump’s speech received mixed reviews from Davos attendees. While some praised his "common sense" approach, others expressed concern about the potential global impact of his policies. "It’s nothing new, but it’s clear what he wants to do," said one Swiss executive. "Am I happy? No, I’m not happy. I think it’s bad for the world."

As Trump continues to push for lower oil prices and stronger U.S. energy independence, the global energy market remains on edge, awaiting OPEC’s next move.