Sen. Lisa Murkowski of Alaska said U.S. refiners could face “unintended consequences” if President Trump were to block a fleet of incoming tankers set to deliver some 40 million barrels of oil here over the next month.
The statement is a softening of her recent position on the issue. Murkowski had joined other oil-state Republican senators in encouraging the Trump administration to block the shipments and calling on Saudi Arabia to turn around the tankers itself. She had argued the new oil would worsen the nation’s oversupply problem and lack of storage and force historically low oil prices down further.
Murkowski took a more cautious position in an interview with the Washington Examiner on Thursday, saying she learned to appreciate the perspective of U.S. refiners who say stopping the crude would disrupt the global energy market, narrow their options for imports, and raise their prices.
“When I made that statement, it was well-intentioned from the perspective of we have limited capacity, and we need to look to our own domestic industries so we don’t need Saudi Arabia,” said Murkowski, the chairman of the Senate Energy Committee. “But in fairness, we need to be aware of unintended consequences and recognize any trade restrictions, whether it’s telling tankers to turn around, or an import ban, all can have unintended consequences, and we need to be very cautious.”
The problem for U.S. refiners is that many were built to run medium and heavy crude of the type that Saudi Arabia makes and can’t rely only on shale producers that specialize in light, sweet oil.
Only 3% of the oil used by U.S. refineries last year came from Saudi Arabia, a portion trending downward over recent years as domestic shale became dominant. But if Trump were to block the oil or interfere with agreed-to contracts, he’d risk upsetting the relationship between U.S. refiners and Saudi Arabia, while giving up business to other countries that would absorb the crude planned for the United States.
Most of the incoming oil is under contract by U.S. refiners, and many of the contracts were signed before the oil market crisis in early March or late February, Murkowski said, citing a recent conversation she had with Energy Secretary Dan Brouillette.
“We have to recognize how refiners work and what they are set up to take,” Murkowski said. “As much as some people say just take U.S. oil, if a refinery is not set up for that crude, we need to acknowledge that as well. They can’t just flip the switch.”
