Saudi "Pearl Harbor" Attack on Permian Shale Headed Here

WASHINGTON, DC — “This is the American energy producers’ Pearl Harbor. We know the ships are coming in, and yet nobody is doing anything about it,” Kirk Edwards, president of West Texas oil company Latigo Petroleum LLC, told the Wall Street Journal. “Every barrel they’re bringing in on those ships backs out a barrel of oil produced here in the Permian Basin.”

According to reports, there are 20 oil tankers, loaded with a combined 40 million barrels of Saudi crude, expected to arrive at Gulf Coast ports in late May. The tankers were filled and launched in late March and early April from the Persian Gulf, before a brokered deal was reached between the Saudis and the Trump administration to cut oil production.

The 40-million barrel load is about seven times the amount of oil the Gulf Coast ports have received from the Kingdom of Saudi Arabia in a typical month this year, the Journal reported. The oil will fill scarce storage capacity, displacing Permian Basin oil. The May 2020 futures for West Texas Intermediate, the trading instrument for Permian oil, sold at minus-$38 per barrel earlier this month because there is nowhere to store oil pumped out of the ground.

Congressman Mike Conaway (TX-11), wrote a bipartisan letter with Congressmen Kelly Armstrong (ND-At Large) and Will Hurd (TX-23), who together represent the largest oil producing regions in the country, called on the Department of Commerce to begin an immediate investigation into the potential illegal delivery of crude oil by the Kingdom of Saudi Arabia into the United States oil market.

In the letter, the three congressmen who represent the Permian Basin, North Dakota’s Bakken, and the Eagle Ford oil fields, demanded the president maintain a level playing field to protect the shale producers.

“We implore your department to move swiftly to investigate the Kingdom of Saudi Arabia and hold it accountable for any potential actions to intentionally weaken America’s energy independence and to protect jobs of hard-working Americans,” the congressmen wrote Wilbur Ross, the Secretary of Commerce. Seven additional congressmen signed the letter.

Read the entire letter here.

Congressman Mike Conaway represents San Angelo and the Permian Basin.