US President Donald Trump has his sights set on oil prices as a way of targeting Russia's finances to end its war in Ukraine — but it's been met with resistance by oil-producing countries.
Ahead of a scheduled meeting of the Organization of the Petroleum Exporting Countries (OPEC+) on Monday night (AEDT), Trump reiterated calls for it to "drop the price of oil", after which he said "that war will stop right away".
OPEC+'s Joint Ministerial Monitoring Committee has since met to review and assess oil production levels. Russia's deputy prime minister Alexander Novak said the group discussed Trump's call during the meeting but agreed to stick with its previously agreed policy of gradually raising oil output from April.
Monday night's meeting coincided with a rise in oil prices after Trump announced tariffs on Mexico — later delayed for a month to allow for negotiations — Canada and China, America's top trading partners.
Professor Wesley Widmaier, from the Australian National University's international relations department, said while Trump's approach could present a "reasonable" worldview, it had to be considered within the context of the war and the interests of OPEC+ member nations.
Mick Ryan, a senior fellow for military studies at the Lowy Institute, said a range of issues would need to be resolved to give Trump's counterpart, Russian President Vladimir Putin, a reason to end the war.
What has Donald Trump said?
Late last month, the US president said he would ask Saudi Arabia and other OPEC+ nations to "bring down the cost of oil" during a virtual address to the World Economic Forum in Davos, Switzerland.
"If the price came down, the Russia-Ukraine war would end immediately," he said.
"Right now, the price is high enough that that war will continue. You [have] got to bring down the oil price; you’re going to end that war. They should have done it long ago."
Trump's remarks followed a conversation with Saudi Arabia's Crown Prince Mohammed bin Salman, during which the White House said the kingdom's "international economic ambitions" as well as trade issues were discussed.
According to the Saudi State news agency, the kingdom wants to put US$600 billion ($980 billion) into expanded investment and trade with the US over the next four years.
"But I'll be asking the crown prince, who's a fantastic guy, to round it out to around $1 trillion ($1.6 trillion)," Trump told the forum. "I think they'll do that because we've been very good to them."
The price of US crude oil, from 2002 to 2024. Source: SBS News
"One way to stop it quickly is for OPEC to stop making so much money and drop the price of oil ... That war [in Ukraine] will stop right away," Trump said.
Saudi Arabia is the "market maker" of OPEC+, Widmaier said. The intergovernmental organisation has a stated objective to "coordinate and unify petroleum policies of its member countries" and "ensure the stabilisation of oil markets" to secure a regular supply to consumers.
OPEC was formed in 1960 by Iraq, Iran, Kuwait, Saudi Arabia and Venezuela, and now has 12 member countries. In 2016, a grouping of oil-producing countries including Russia, Kazakhstan and Mexico became part of OPEC+, which works with OPEC on oil initiatives.
How could lowering oil prices end the war in Ukraine?
Russia is among the world's top three oil producers, behind the US and Saudi Arabia, according to the US Energy Information Administration.
In 2023, the country produced 10.75 million barrels of crude oil and all other petroleum liquids per day — or 11 per cent of total world production.
It's also among the top oil exporters, according to OPEC's 2024 Annual Statistical Bulletin.
Oil prices have risen this year, with Brent crude oil reaching almost $83 a barrel on 15 January and settling at its highest since August, supported by concern about the supply impact of US sanctions on Russia that were announced in January.
OPEC+ members are currently holding back 5.85 million barrels per day of output, equivalent to about 5.7 per cent of global supply, in a series of steps agreed since 2022 to support oil prices.
The group's plan to start raising oil output from April, gradually unwinding previous cuts, has been delayed several times due to weak demand.
Based on that plan, the unwinding of 2.2 million barrels per day of cuts and the start of an increase for the United Arab Emirates will mean a monthly rise of 138,000 barrels per day, according to Reuters calculations. The hikes will last until September 2026.
OPEC+ members agreed on Monday night to continue with that plan. The organisation is next set to meet in early April.
The world's top exporters of crude oil in 2023. Source: SBS News
"You're talking about dealing with countries — and specifically Saudi Arabia — where countries do possess market power, where an increase in oil production by OPEC could affect global oil prices ... It's not entirely misplaced," he said.
But, as reflected by Monday night's decision, he doubted both that OPEC would agree to it, and that it would have any effect on Putin.
Widmaier said decisions on oil prices tend to be local in nature — and responses to international needs are rare.
"Even if they [the Saudis] were to do it, you would have to wonder that it would have the effect on Putin."
Ryan agreed, saying he finds it "hard to believe that OPEC will just drop its rate, unless there is some kind of inducement from the US president".
"At the end of the day, it might reduce Russia's foreign export income. But we should recall Russia went into this war with massive reserves, and it can continue to draw on those reserves for some time to come," he said.
Ryan called it "very unlikely" that countries such as India and China would stop buying energy from Russia.
"It could have an impact. But I doubt very much it will have the significant impact that the current US administration is describing it would have."
What has Russia — and OPEC+ — said?
Late last month, Russia insisted a negotiation on Ukraine could not be made by a drop in oil prices.
"The conflict doesn't depend on oil prices," Russian government press secretary Dmitry Peskov said in a conference call with reporters.
"The conflict is ongoing because of the threat to Russia’s national security, the threat to Russians living on those territories and the refusal by the Americans and the Europeans to listen to Russia’s security concerns. It’s not linked to oil prices.”
The oil price remarks follow recent threats from Trump to ramp up economic measures
However, Ryan said sanctions and energy prices are only one part of the picture.
"While sanctions, and the economic dimensions of this war are important, the economic dimension alone is not going to end this war," he said.
"There's a whole range of military, societal, political and alliance issues that also need to be resolved to give Putin a reason to want to end this war."
What impact would failing oil prices have in Australia?
If oil prices were to fall, Ryan said this could potentially reach Australia.
"It'd be nice to be able to fill up the car for less than $2 a litre, wouldn't it?" he said, adding the tactic — if successful — could also impact Trump's popularity in the US.
"Just like it is in Australia, it's one of those things that people watch constantly. It has an impact on inflation," he said.
"Cheaper fuel prices have an impact not just on normal citizens, but businesses and farmers. So it's hard to see how that would not be popular."
With additional reporting by Reuters.
