WASHINGTON/HOUSTON (Reuters) - The Trump administration plans to send a special energy envoy to Saudi Arabia to work with the kingdom on stabilizing the global oil market, officials said on Friday, as the U.S. scrambles to deal with a price crash so deep that regulators in Texas considered curbing production there for the first time in nearly 50 years.

FILE PHOTO: U.S. President Donald Trump speaks with Saudi Arabia's Crown Prince Mohammed bin Salman during family photo session with other leaders and attendees at the G20 leaders summit in Osaka, Japan, June 28, 2019. REUTERS/Kevin Lamarque/File Photo

Oil prices LCOc1CLc1 have lost more than half their value in the last two weeks as Saudi Arabia and Russia kicked off a price war and the coronavirus pandemic destroyed demand. U.S. oil now trades at less than $23 a barrel.

The crash has shocked the oil industry as a pact among OPEC and non-OPEC producers to cooperate imploded, triggering a production free-for-all.

The United States is sending a special representative to negotiate with Saudi Arabia, officials said Friday, after the kingdom unleashed production following years of touting its role as a stabilizing force for markets.

Saudi Arabia and Russia are locked in a war for global oil market share after their three-year deal to restrain output collapsed this month. The kingdom has vowed to increase production to a record 12.3 million barrels per day, and has chartered numerous tankers to ship oil around the world, pushing prices to near 20-year lows this week.

U.S. officials believe Saudi Arabia’s move to flood oil markets compounds the global economic crash during a crisis caused by the pandemic.

A senior Energy Department official will be sent to Riyadh for months at least to work closely with State Department officials and the existing energy attache, the senior U.S. officials said, on condition of anonymity.

Trump administration officials said Saudi Arabia has for decades been a steadfast leader of stability in the global oil market. The energy representative would help the countries return to a path of stability, they said.

The price crash is also devastating to U.S. oil producers, some of which have already begun putting employees on furlough.

The hope is that President Donald Trump could negotiate with Saudi Arabia and Russia and convince them to match cuts with a similar cut in production in Texas, said Ryan Sitton, a commissioner with the Texas Railroad Commission, the body that regulates the state’s oil and gas industry.

Sitton said production limits could be implemented quickly, though no one who works at the agency was around the last time the state limited production, in the early 1970s.

“We need to take the time to hear from everybody,” he said, adding that he was not yet advocating for the cuts. But “if we can help (Trump) get a deal done, then I think that’s when we do something.”

Sitton said on Twitter that he spoke with OPEC Secretary General Mohammad Barkindo about an international deal “to ensure economic stability as we recover from” the coronavirus outbreak. Sitton said Barkindo was “kind enough to invite me to the next OPEC meeting in June.”

Barkindo told Reuters that he and Sitton discussed their “perspective on current developments, and the possibility of future cooperation” in a teleconference. Barkindo and OPEC ministers have, in the past, met with shale-industry executives at annual conferences.

A senior State Department official said the federal government does not have the ability to restrict the Texas regulator from any work with OPEC to cut production.

“Those are wholly within state matters ... from a federal level we have no ongoing engagements with OPEC, it’s a cartel,” the official told reporters in a teleconference.

U.S. INDUSTRY UNMOVED

Some U.S. industry representatives were skeptical that Texas should intervene in the market. U.S. oil producers have long resisted such a move, and the industry’s largest trade association did not sound convinced on Friday, either.

“Our view is simple. Quotas are bad,” said Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute. “They’ve been proven ineffective and harmful. There’s no reason during this time to try to imitate OPEC.”

In the last several years, shale operators using the innovative hydraulic fracturing, or fracking, technique, have boosted U.S. oil output to nearly 13 million barrels per day, making it the world’s largest producer. Since 2016, as OPEC restrained production, the United States has taken market share from Saudi Arabia, Russia and other nations.

Russia has been slower to come on board with OPEC's continued efforts to bolster prices, and the country's largest oil producer, Rosneft ROSN.MM, has been an opponent of the deal with OPEC to cut supply. Units of Rosneft, and its managers, were recently sanctioned by the United States due to its trade relationship with Venezuela.

Trump administration officials will continue to reduce global oil output with sanctions on what the officials called bad actors in Iran and Venezuela, both of which are OPEC members, and their shipping networks, the officials said. To the extent that Russia is involved in marketing Venezuelan oil, it will be sanctioned, the officials said.

A group of nine Republican U.S. Senators, mainly from oil producing states, urged Commerce Secretary Wilbur Ross late on Friday to investigate whether Saudi Arabia and Russia were excessively dumping oil on global markets.