The US has not abandoned the idea of imposing duty on oil imports

The US threat of imposing duties on oil imports has not abandoned since the latest supply cuts agreement by OPEC+ and other major oil producers, according to the US Assistant Secretary of State for Energy Resources Francis Fannon.

Before oil producers could agree on a contraction in production, Donald Trump threatened to impose duties on oil imports if Riyadh and Moscow failed to agree. And that option has not been completely removed from the equation, according to Francis Fannon.

“This signals that the US wants to ensure that the agreement is actually implemented”, he said. According to him, Trump considers such a possibility of imposing duties on oil imports.

It will take time to overcome the oversupply of oil, which has been seen in the global markets for some time after the deal is reached, said Francis Fannon. According to him, there will be a gradual delay in stockpiling.

“What we’re talking about are huge stocks of physical goods that have been accumulated over time”, Fannon points out.

His comment was preceded by Trump’s decision to boost the shrinking agreement, with OPEC+ countries agreeing to shrink production by almost 10% to reanimate oil markets, shaken by downturns in demand national blockades aimed at counteracting the spread of the coronavirus.

But the International Energy Agency (IEA) warned on Wednesday (April 15th) that the agreement reached on large-scale cuts in production and supply would not be enough to balance the market.

In the US, shale companies have already begun to cut costs in response to market problems.

“The whole shale revolution was based on the private sector and responsive to the market”, said Fannon. “I am confident that this private sector will respond in the opposite direction as well”, he added.