Prime Minister Justin Trudeau said Canada is “very concerned” with the Organization of the Petroleum Exporting Countries’ (OPEC) decisions amid the novel coronavirus outbreak, but that the government remains focused on helping Canadians struggling as a result of the dramatic drop in oil prices.
Trudeau made the remarks during a press conference from Rideau Cottage on Saturday, saying OPEC’s decisions are “putting at risk the livelihoods of people around the world, particularly Canadians who work in the oil and gas sector.”
The price of oil sank nearly 20 per cent in early March after Russia refused to roll back production in response to falling demand and OPEC member Saudi Arabia signalled it will ramp up its own output.
Saudi Arabia‘s state-run oil giant Saudi Aramco said it would increase its crude oil production to 12.3 million barrels a day in April, a record amount.
While low oil prices can translate into cheaper gasoline, they wreak havoc on energy companies and countries that count on petroleum revenue.
Trudeau said the government remains focused on helping Canadians who are “hardest hit” economically by COVID-19.
“The measures we’ve put in place will support Canadians right across the country, including in our oil and gas sector,” he said. “But we also know it’s a sector that has been particularly hard-hit and we will look for further help to be able to support people as they get through.”
The price of Western Canadian Select for crude fell below $5 USD a barrel on Friday, as demand during the COVID-19 outbreak continued to drop.
Western Canadian Select prices averaged $27.28 USD a barrel in February, almost 40 per cent lower than the average in February 2019.
“I fear if the Saudis and Russians continue this foolishness in the midst of a crash in demand you will see these kinds of catastrophically low prices for some time and ultimately producers will have nowhere to ship it to in the short term,” Kenney told reporters on Friday.
Kenney said Canada should consider coordinating with the U.S. to end what he called “predatory dumping” by Saudi Arabia.
“Some measures would include, potentially, tariffs on foreign oil imports or certainly a potential investigation into dumping activity by OPEC into the North American market,” Kenney said.
Kenney said 13 U.S. Senators have written to U.S. President Donald Trump calling for such an investigation to be launched.
But, when asked by reporters if Canada would consider taking a more aggressive approach in dealing with Saudi Arabia, Trudeau said he thinks Canada should focus on “getting through COVID-19 as best we possibly can.”
“I think there will be a lot of reflections on how various countries behaved in this particular moment. Our focus right now is on making sure we can support our citizens and stabilize the global economy the best way we can, which we are doing in our membership in the G7, in the G20, in various international fora and approaches that we have,” he said. “While at the same time focusing on making sure we’re supporting Canadians and keeping them safe.”
When asked when people in the hard-hit energy sector will know what kind of aid to expect, Trudeau said the government is continuing to work with provinces and industry members to “get this right.”
“People in industries and places right across the country are going to be able to pick themselves up and get back to work and have our economy continue to work strongly like it was before,” Trudeau said.
“It’s going to take a lot of effort in the meantime, and it’s going to take us doing different things and trying different things, but we are going to keep working until we may manage to help everyone,” he continued.
–With files from The Canadian Press