(Bloomberg) — OPEC’s two biggest suppliers to the U.S. shrugged off a vow by President Donald Trump to end dependence on the group’s oil, saying the world’s biggest economy would continue to need crude from abroad.
The U.S. is “closely integrated in the global energy market,” Saudi Arabia’s Energy and Industry Minister Khalid Al-Falih said, while his Venezuelan counterpart Nelson Martinez said he expects his country’s crude exports to the world’s top consumer to remain stable.
“The positions that the U.S. and Saudi Arabia take in global energy are very important for global economic stability,” Al-Falih said Sunday at a meeting of producing countries in Vienna. He added that Saudi Arabia was looking forward to working with the Trump administration.
Just after his inauguration on Friday, Trump said he was “committed to achieving energy independence from the OPEC cartel and any nations hostile to our interests,” by exploiting “vast untapped domestic energy reserves”, according to a plan posted on the White House website. The U.S. imported about 3 million barrels a day from the organization last year, with Saudi Arabia and Venezuela accounting for 1.81 million, according to data compiled by Bloomberg.
This isn’t the first time a U.S. president promises to end the country’s reliance on supplies from the Organization of Petroleum Exporting Countries. Former President George W. Bush promised to cut imports from the Middle East when he said in 2006 the nation was “addicted to oil.” Shipments from OPEC rose 10% during Bush’s time in office. Every U.S. president going back to Richard Nixon has pledged to reduce the country’s reliance on foreign oil.
Venezuela’s Martinez played down any concern that his country’s shipments to the U.S. might dwindle under a Trump administration. “The export volumes will be maintained,” he said. “There is a lot of interdependence in the world of energy. It’s good to maintain it for everyone’s good.”
Saudi Arabia exported an average of 1.08 million barrels a day of crude to the U.S. in 2016, while Venezuela shipped about 733,000 barrels a day and Iraq some 400,000 barrels a day, according to data compiled by Bloomberg.
OPEC is waiting for a new U.S. energy secretary to take office to learn more about Trump’s energy policies, Mohammad Barkindo, the group’s secretary-general, said Sunday in the Austrian capital.
The U.S. is benefiting from the price increase following OPEC’s December agreement with other producers to reduce oil output, according to Algeria, another member of the group. “OPEC is currently helping the U.S.,” Noureddine Boutarfa said Saturday in an interview in Vienna. “The price recovery is helping U.S. companies, the U.S. industry, the U.S. economy.”
Crude prices rose to an 18-month high of more than $58 a barrel after OPEC and several non-members agreed to end two years of unlimited production and instead cut output. Prices have since slipped about 5% from that peak as traders await proof that the producers will follow through.
Benchmark Brent crude was down 0.9% in London on Monday at $54.98 a barrel at 2:57 p.m. local time, after rising 2.9% over the previous two sessions.
Even as Trump commits to ending U.S. reliance on OPEC’s oil, the new administration said it would “work with our Gulf allies to develop a positive energy relationship as part of our anti-terrorism strategy.”
Al-Falih suggested Saudi Arabia could always export its oil somewhere else, if the U.S. stopped buying.
“Oil is fungible, so it flows around — what doesn’t get sold in one market can be sold in another,” he said.
Bloomberg News by Angelina Rascouet and Grant Smith