Exclusive President Trump won't declare war on OPEC, says US energy secretary
US Energy Secretary Chris Wright has downplayed the recent plunge in oil prices and ruled out any conflict with OPEC, despite growing concerns among Gulf producers about the impact of tumbling crude markets.
Speaking to Al Arabiya News' Hadley Gamble in Riyadh on Sunday, Wright insisted that lower oil prices – which briefly dipped below $60 a barrel following fresh Trump administration tariffs – are not a reflection of long-term weakness, but rather a result of 'overblown pessimism' about global growth.
'Oil prices are sort of this… people looking ahead in the marketplace,' Wright said. 'I think what you're seeing today is… probably an overly large concern about economic growth going forward.'
Brent crude has dropped by as much as $10 a barrel since the Trump administration escalated its trade war with China and introduced sweeping tariffs on foreign vehicles, steel, and general goods, spooking investors and hitting demand forecasts. Wright defended the tariffs, saying they are part of a larger push to 'reindustrialize America.'
'If you're in finance or advertising or media, it hasn't rained on your parade,' he said. 'But for so many Americans, we've shrunk the jobs and economic opportunities for them… President Trump is adamantly focused on bringing those jobs, that investment, back into our country.'
Despite growing unease in energy markets, Wright rejected any suggestion that Trump might target OPEC. 'Oh, I don't see that happening at all,' he said. 'The nations here in the Middle East, I think, fundamentally want the same thing we want… The only way to have some of the 7 billion people [around the world] live like you and I, it's just massively more energy in the world.'
Wright, a former CEO of Liberty Energy – North America's second largest fracking company – offered a nuanced view of the US shale industry, acknowledging the pain some producers are facing at current prices, but insisting that the sector remains resilient.
'There's a portfolio of drilling locations. The best operators with the best locations have very low break even prices… The lower quality operators that have… lower quality marginal… I mean, resources that are much lower quality, their price to break even is much higher,' he said. 'It's more a continuum. There's not a one price it works and one price it doesn't work.'
Wright said oil and gas innovation has consistently lowered break-even thresholds over the past decade, crediting 'American technology, American innovation, American efficiency and supply chain.'
He also dismissed suggestions that the Trump administration's energy policy is undermining shale. 'They're wrong. That's concerns about short term… people always take a trend, however long that trend is, and extrapolate that trend. The world just doesn't work that way.'
'I can't predict oil prices, that's for sure,' he said. 'But oil prices are a function of market expectations.'
Wright painted a bullish picture for the future, pointing to Trump's economic agenda as a catalyst for stronger global demand. 'I see no reason we won't have the same results here [as in his first term], but I think even better this time.'
Wright also addressed the prospect about a return to Russian energy in Europe.
'I think there's pretty strong resolve there that… we hitched our wagon to Russia, and it didn't work out well, and we don't have any intention of going right back to that,' he said. 'He's [Putin] lost his largest export market for natural gas to Europe. He's got lower oil prices. He's become a pariah around the world… It's in Russia's best interest to get to a peace agreement.' he added.
Although the main focus of Wright's trip is oil and gas, he also revealed that Washington is working on a broader energy partnership with Saudi Arabia that includes a potential commercial nuclear deal. A specific agreement will take 'months, not weeks,' he said, and would require a '123 Agreement' under US law.
But the message to Gulf producers was unequivocal: America is back.
'American partnership is back. It's stronger,' Wright said. 'We're not shutting your industry… Our interest is America is a strong, resolute ally. American leadership is going to lead to strong economic growth, which leads to strong growth in energy demand, which is great for energy producers and for energy consumers.'
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