MIDLAND, Texas (Big 2/Fox 24) – As the Railroad Commission continues to contemplate proration, Texas is receiving quadruple the normal Saudi oil – 1.46 million barrels per day in the first two weeks of April, after more than doubling in March.
This deepens the supply glut in our country, further asphyxiating domestic producers by driving price down when suppliers are already asking for fractions of the crude they had been.
Many locally are questioning why producers must cap production if refineries can buy from whomever they please. Saudi Arabia has loaded 40 supertankers with crude, and experts say they are headed our way for the next few weeks before the deal reached by OPEC+ goes in to effect.
“Right now, Texas is seeing a Pearl Harbor event, except we know that the ships are coming.”Kirk Edwards, CEO of Latigo Petroleum
According to Saudi state oil producer Aramco, the company loaded 15 tankers for its international customers on April 1, which was the exact day a previous OPEC production cut agreement with its oil-producing allies, OPEC+, expired. They supplied the tankers with a record 18.8 million barrels in a single day.
“If that isn’t an act of aggression against our domestic producers, I don’t know what is.”Kirk Edwards, CEO of Latigo Petroleum
For the Saudis, the motivation is clear – to grab as much market share as they can before that may deadline. Edwards questions the U.S. motive.
“When you have Saudi Arabia literally dumping millions of barrels of oil a day into the Gulf Coast refining complex at unprecedented low prices and blocking out all the domestic production… there’s no way that can be a free market when you have a foreign country doing that to American producersKirk Edwards, CEO of Latigo Petroleum
The Texas Railroad Commission will meet again Tuesday to discuss cuts. Many opposed to the cuts cite free market principles working like Darwinism to fix the market. UTPB’s Stuart Macdonald has been in oil his entire life, predating the 1973 proration of oil in Texas. The professor in the College of Business questions if a free market has ever existed in the oil market.
“The question is free market or prorationing. There’s this cartel that influences oil prices. Prior to 1973 we were in the driver seat. Do we want to have a voice in what that cartel does, or do we want to sell the price that Saudi’s and Russian’s dictate?”Dr. Stuart MacDonald, UTPB College of Business