President Donald Trump announced plans to request Saudi Arabia and other OPEC nations to “lower the cost of oil” while reiterating his threat to impose tariffs.
Speaking to executives at the World Economic Forum in Davos on Thursday, Trump expressed surprise that OPEC had not reduced oil prices ahead of the elections.
“The current oil price is high enough to sustain the ongoing Russia-Ukraine war,” Trump remarked, suggesting that elevated prices were indirectly funding Moscow’s conflict. He added, “Lowering the oil price would put an end to that war. It could be done.”
Trump’s remarks followed his conversation with Saudi Crown Prince Mohammed bin Salman on Wednesday. According to Saudi state media, the Crown Prince pledged up to $600 billion in U.S. investments over the next four years. However, this figure was notably absent from the White House’s summary of the call.
Despite the seemingly amicable exchange, Trump said he would ask the Crown Prince, whom he described as “a fantastic guy,” to increase the commitment to around $1 trillion.
Following Trump’s comments, crude oil prices dropped by 1%.
David Oxley, Chief Climate and Commodities Economist at Capital Economics noted that Trump’s remarks reflect his ongoing push for lower gasoline prices. He added, “[Trump’s comments] demonstrate his intent to use energy as leverage against Russia to end the war in Ukraine. However, lower oil prices would not encourage U.S. oil producers to ramp up production, especially in high-cost regions like Alaska.”
“Of course, Saudi Arabia would not be guaranteed to heed a request by President Trump to expand oil production and to bring down global oil prices.”
The US president’s appearance via video at the World Economic Forum marked his first address to a global audience since his inauguration earlier this week.
He used the platform to insist that companies around the world manufacture their products in the US or face bruising tariffs on imported goods entering the American market.
BBC reporter Oliver Smith, who was in the room with the delegates as the President made his speech, said there were “a few stoney faces” as executives left the hall after the speech, but some happy ones, too.
“A very powerful speech,” says one.
“I liked it, I thought it was really good,” says another delegate from the US.
“A lot of it made sense. Common sense. He’s just looking for fair trade”, he added
One Swiss executive, though, was pretty downbeat. “It’s nothing new, but it’s clear what he wants to do”, he said.
“Am I happy? No, I’m not happy. I think it’s bad for the world,” he adds
Trump also said he would demand an immediate drop in interest rates, which he said had led to deeper deficits and resulted in what he described as economic calamity under the tenure of his predecessor, President Joe Biden.
“This begins with confronting the economic chaos caused by the failed policies of the last administration,” he said.
“Over the past four years, our government racked up $8 trillion in wasteful deficit spending and inflicted nation-wrecking energy restrictions, crippling regulations and hidden taxes like never before.”
Trump also spoke of “good, clean, coal” to power data centres needed for artificial intelligence. “We need double the energy we currently have in the US, for AI to be as big as we want to have it,” he said, adding that he would use emergency decrees to speed the construction of new power plants.
“Nothing can destroy coal — not the weather, not a bomb, nothing,” said Trump.
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