Oil prices plunged on Monday and the energy sector is down more than 20% from recent highs. In an effort to keep U.S. companies competitive during the downturn the Trump Administration is likely seeking low-interest government loans for the energy companies.
Plummeting oil prices have hit U.S. companies particularly hard as they seek to compete with state-owned oil companies around the world. Despite what is perceived as a global oversupply of oil there are indications that oil production will continue to increase in Saudi Arabia, Russia, and elsewhere. The Trump Administration aims to ensure energy companies can continue to operate profitably and is exploring different bailout packages including low-interest government loans. Specific details, including how broad the assistance will be, are unclear as the White House has not commented on the potential bailout.
The U.S. Department of Energy released the following statement, “These attempts by state actors to manipulate and shock oil markets reinforce the importance of the role of the United States as a reliable energy supplier to partners and allies around the world...The United States, as the world's largest producer of oil and gas, can and will withstand this volatility. The growth of the unconventional oil and gas industry in the United States has led to a more secure, resilient and flexible market."