Harold Hamm, Donald Trump’s top energy adviser, has urged Russia and Opec to rein in oil production in an effort to raise prices, saying US companies have already lowered output during a two-year price war that has upended the energy industry.
Mr Hamm, a billionaire pioneer of the North American shale boom who has been tipped as a potential energy secretary should Mr Trump win the US presidential election, said Opec and Russia should agree to freeze production when they meet this month to discuss ways to stabilise the market.
His comments mark a rare backing from someone advising a US presidential candidate for market intervention by Opec, which is still closely associated in the US with the Arab oil embargoes of the 1970s.
This week Russia, the largest oil exporter outside Opec, with Opec kingpin Saudi Arabia to work together in the oil market.
“I think it would be high-time for them to come to an agreement,” Mr Hamm told the Financial Times at a conference in Singapore. “US producers have cut back, we’ve done our part. It would finally make sense for a freeze in production to be implemented.”
As the founder and chief executive of , one of the largest US shale producers, Mr Hamm would stand to gain personally from any effort to raise oil prices.
Opec ministers are due to meet Russian officials in Algiers this month to discuss a possible output freeze, with the aim of raising or at least stabilising oil prices, which fell below $30 a barrel at the beginning of this year amid a long-running glut.
Mr Hamm’s comments may also reflect a growing dichotomy in the US. While low prices have long been feted as a boon for consumers, the oil price crash has been painful for energy-producing states such as Texas and North Dakota.
Lower prices have also slowed plans to wean the US off imported oil, with domestic production falling and drivers turning back to gas-guzzling cars.
Jason Bordoff, a former Barack Obama energy adviser, who now runs Columbia University’s Center on Global Energy Policy, said major oil importing countries had long opposed efforts to control the market.
“Higher US oil production means the drop in prices has given less of a boost to the US economy,” Mr Bordoff said.
“But calling on the world’s largest oil producers to manipulate the market and prop up the price is a short-sighted move that could come back to bite us in the future.”
Oil prices have halved in the past two years as the world’s largest producers have raised production in an effort to head off shale and other higher-cost methods of production, which had helped almost double US oil output between 2008 and 2015 when crude largely traded near $100 a barrel.
US oil production has slipped by about 10 per cent since peaking at 9.6m barrels a day in April 2015, though the US Energy Information Administration has said that the pace of the decline is slowing. On Wednesday the agency cut its forecast for the drop in US output in 2017, saying it now expects it to decline by just 260,000 b/d after forecasting a 420,000 b/d fall last month.
Companies have squeezed down costs and are now closer to profitability at $50 a barrel than they were at the beginning of the price crash, raising fears among Opec countries who have seen their budgets decimated by the slump.
“Everyone was expecting mass bankruptcies,” Mr Hamm said at the Platts Asia Pacific Petroleum Conference. “They’re showing a discipline that no one thought would be possible.”
Mr Hamm’s personal fortune was hit hard by the oil crash, with more than $9bn wiped off his net worth as Continental’s shares slumped 80 per cent between late 2014 and early 2016.
Since then, however, Continental’s share price has jumped by more than 250 per cent as oil has recovered to near $50 a barrel and the company’s production has proven resilient to the downturn. Mr Hamm’s net worth is calculated at $14.5bn by Forbes.
Mr Trump has vowed to unleash the full power of in US energy policy, warning that attempts by his Democratic rival Hillary Clinton to restrict fracking would leave the US “begging” for Middle Eastern oil.
In July he praised Mr Hamm as “the kind of guy we want telling us about energy”.
“That guy takes a straw, puts it in the ground and oil pours out of it,” Mr Trump added.
Mr Hamm also attacked President Obama’s handling of the economy, saying the growth rate in the US was disappointing and would have been lower without the drop in oil prices.
“What would have happened if we hadn’t had those cheap energy prices?” Mr Hamm asked. “It would have been a disaster in America.”