The actions of Saudi Arabia and Russia to accelerate a fall in oil prices that were already tumbling due to COVID-19, and the United States’ inability to counter effectively, demonstrate the energy security weaknesses our reliance on an unstable and unfree oil market.
In response, Securing America’s Future Energy and members of its Energy Security Leadership Council—a group of business and former military leaders concerned with the effects of the global oil market on U.S. economic and national security—have authored op-eds calling for a comprehensive response that enhances American energy security.
The falling price of oil may be pleasing consumers by producing cheap gas prices at the pump, but the bigger picture shows the U.S. needs a true energy dominance policy. Although the full scale of the coronavirus’s impact on the U.S. may not yet be known, it increases the pernicious effects of slumping oil demand that has dragged prices down.
However, if we add in the economic attack of Saudi Arabia and Russia’s engineered price shock that has further rocked our domestic industry, it should remind us that we need such a strong policy.
In today’s oil market, the United States is dependent upon the actions of Saudi Arabia, OPEC and OPEC+ nations like Russia. It is clear the United States needs a more comprehensive approach, and quickly. A strategy that makes true energy dominance the goal must include a competitive world oil market in which American domestic production can flourish.
While American oil producers will flourish in a competitive market that promotes transparency, energy security is equally about consumption as it is production. To make our oil production advantage truly count for our energy security, we must consume less as we produce more.
Oil’s recent fall into negative territory must provoke policymakers to reexamine what American energy dominance looks like, as it has become abundantly clear once again that the U.S. economy is reliant on a commodity that we cannot control and is manipulated by countries who do not share our interests or values.
These events have shone a harsh spotlight, in the starkest terms, on the vulnerability of the U.S. in an unfree oil market that is dominated by OPEC+ market manipulation, led by Saudi Arabia and its vast reserves of cheaper oil, for a commodity so essential to powering our economy.