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President Trump reached for his oil market red phone for a call with King Salman of Saudi Arabia as oil prices stayed above $80 last week and now flirt with $85. Trump delayed his Saturday golf game for the call that was characterized by the Saudi state-run press agency as a discussion about the “stability of oil markets.” 

Trump Reaches for Oil Market Red Phone  - zred

While the US did not release a statement on the substance of the call, you can bet that oil prices were Trump’s top concern. Our Hedgeye client note last Tuesday said high oil prices are one of Trump’s top concerns of many issues he is personally following, and it resulted in his tough OPEC criticism at the United Nations General Assembly. 

We also said in our note that “the President may also call King Salman directly if prices do not retreat below $80 in the coming days.” 


As a result, we think it is very likely the Saudi’s will have more to say on production this week maybe even in the form of a press release from the energy ministry or Aramco. The subtle messages used to date to try to thread the needle between OPEC internal politics and Trump pressure have not worked so far. Thursday’s meeting in Moscow between Saudi Energy Minister Khalid al-Falih and Russian Minister Alexander Novak has the potential to be a big catalyst for the week. 

Here is the timeline from last week’s event that led to the Saturday call on the oil market red phone: 

Monday - The market was clearly disappointed with the OPEC meeting that did not offer a specific number for increased production. 

Tuesday - After Trump’s UN speech in which he called on OPEC to increase production and “start lowering prices”, US officials began reaching out to Gulf producers with similar messages.  Trump believes he has an agreement with Saudi Arabia and the UAE to offset any Iran barrels lost from sanctions that both countries support.  

Thursday - Two days after Trump’s speech, Reuters reported from an unnamed source that Saudi Arabia was adding 550,000 b/d.  The oil market yawned at that report, and we think prompted Trump’s call with the King to do more. (Saudi Minister al-Falih told reporters after the press conference in Algiers on September 23 last that September production would be up and October would be higher than 10.6 million b/d. 

Saturday – Trump’s call with King Salman of Saudi Arabia.  We believe oil prices were the main topic with Trump urging more action from the Kingdom and OPEC.

We would not be surprised to see a statement from the energy ministry or Aramco soon with more specifics on added production. In addition, Saudi Energy Minister al-Falih will be in Moscow on Thursday to meet Russian Energy Minister Novak when we may see more verbal intervention or announcements to calm markets.

Trump Reaches for Oil Market Red Phone  - early look