Saudi Arabia is sending a fleet of tankers to the U.S. Gulf Coast filled with oil – seven times as much as the region received from the Saudis in a typical month last year – that threatens to exacerbate the U.S. supply glut, WSJ reports.
The fear is that the Saudi crude will fill rapidly dwindling places to store oil, depress already low prices and increase pressure on drillers from Texas to North Dakota to shut off their wells.
The tankers were loaded when Saudi Arabia was pursuing a strategy of increasing production to drive down prices and increase its share of key markets, but the 20 tankers holding a combined 40M barrels of crude are still headed to ports in Louisiana and Texas for expected arrival through late May.
“This is the American energy producers’ Pearl Harbor. We know the ships are coming in, and yet nobody is doing anything about it,” says the head of a west Texas oil firm. “Every barrel they’re bringing in on those ships backs out a barrel of oil produced here in the Permian Basin.”
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