U.S. senators urge Saudis to calm oil market tensions

WASHINGTON (Bloomberg) - More than a dozen U.S. Republican senators wrote to Saudi Crown Prince Mohammed bin Salman to urge him to take action to cool tensions in the oil market at a time when the world economy is already being battered by the coronavirus.

“It was greatly concerning to see guidance from the Kingdom’s energy ministry to lower crude prices and boost output capacity,” the senators wrote in the letter. “This has contributed to a disruption in global oil prices on top of already hard-hit financial markets.”

Saudi Arabia last week vowed to flood the market with cheap crude after the nation failed to reach an agreement with Russia over the best way to respond to the virus outbreak, which has crippled energy demand. Oil prices plummeted following the announcement, breaching the levels necessary to sustain production in many U.S. shale fields.

Amid the market meltdown, shale billionaire Harold Hamm, the chairman of Continental Resources Inc., announced he would file a complaint with the U.S. Department of Commerce against Saudi Arabia for “illegal” dumping of crude. Other oil companies have appealed to the U.S. government for aid ranging from low-interest federal loans to buying up American oil to fill the national Strategic Petroleum Reserve.

“Senior Saudi government leaders have repeatedly told American officials, including us, that the Kingdom of Saudi Arabia is a force for stability in global markets,” said the senators. “Recent Saudi actions have called this role into question.”

They said they will discuss these concerns further at a forthcoming meeting with the Saudi ambassador to the U.S.

The Saudi embassy in Washington didn’t immediately reply to an emailed request for comment.