By Mike Whitney
April 01, 2020 "Information
Clearing House" -
Donald Trump called Russian president Vladimir Putin
on Monday to discuss plunging oil prices that are
wreaking havoc on America’s shale oil industry. The
two leaders talked briefly about the coronavirus
pandemic but quickly switched to Trump’s real
concern which is oil production.
For the last month, Saudi
Arabia has been flooding the market with crude oil
to force Russia to agree to deep production cuts. To
his credit, Putin has stubbornly resisted Saudi
coercion and maintained current output levels. As a
result, prices have plummeted to an 18-year low of
$20.09 per barrel which is well below the break-even
rate that American frackers need to survive. In less
than a month, the capital-intensive US shale oil
industry has gone into a steep nosedive that has set
off alarms on Wall Street where analysts expect that
a wave of defaults will deliver a knockout blow to
the big investment banks. That’s why Trump decided
to call Putin. He wants to see if he can persuade
the Russian president into slashing production.
It’s worth noting, that Putin
remained stoically silent when the Trump
administration imposed economic sanctions on Russia
for its alleged activities in Ukraine. Nor did the
Russian president complain about Washington’s
meddling in Syria or its attempts to block Russia’s
pipelines to Germany and Bulgaria. (Nordstream and
Southstream) But now that the shoe is on the other
foot and US business interests are being hurt, Trump
thinks nothing of calling Moscow for help. As one
critic said, “It looks like the Trump team can dish
it out, but it can’t take it.”
