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New York (CNN Business)Saudi Arabia drew the wrath of Republicans in Washington this spring by sending an armada of tankers to America to drown US oil makers with cheap crude. Now, the kingdom has reversed course, steering the fewest barrels here since the Reagan era.

The United States imported just 264,000 barrels per day of Saudi crude during August, according to estimates from ClipperData, a commodity research firm. That’s down nearly 50% from 2019’s average.
If confirmed by official government statistics, that would mark the lowest amount of Saudi oil exports to the United States since 1985.

    “Saudi crude flows bound for the US have basically dried up,” Matt Smith, director of commodity research at ClipperData, told CNN Business in an email.
    The course-reversal by Saudi Arabia — from intentionally flooding the United States with excess crude to holding back barrels — underscores the kingdom’s dramatic efforts to revive depressed energy markets during the pandemic.

    From price war to unprecedented cuts

    In March and April, Saudi Arabia was engaged in a massive price war with Russia at the worst possible time. Saudi’s surge of shipments to the United States was designed to tank the market and crowd out high-cost producers, including frackers in North Dakota, Texas and Oklahoma.
    Unfortunately, it worked. US crude crashed into negative territory in late April for the first time ever. More than two dozen US oil companies filed for bankruptcy — and many more were on the brink.
    Saudi Arabia has since reached a truce with Russia, paving the way for unprecedented production cuts by OPEC and its allies. Those cuts, along with the rebounding global economy, have lifted US crude from negative $40 a barrel in late April to $43 today.
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    “The collapse in US crude imports from Saudi Arabia…reflects the lurch from an epic OPEC+ market share contest in the spring to unprecedented cuts and discipline during the summer,” Robert McNally, president of consulting firm Rapidan Energy Group, told CNN Business in an email.
    It’s no coincidence Saudi Arabia is focusing its efforts on the United States.
    Not only is it the world’s largest oil consumer, but the United States is the most visible market to the investment community. Statistics on its oil flows and inventories move markets because they are trusted and released weekly.
    “The US has the most transparent and most timely market for data. [The Saudis] get the biggest bang for their buck,” Smith said.

    Winning back Washington’s good graces

    Beyond the market impact, the kingdom may also be working to get back into the good graces of Washington.
    President Donald Trump, normally a fan of cheap oil, voiced displeasure in the spring over Saudi Arabia’s oil strategy, fearing it would hurt American oil companies. Indeed, several high-profile oil companies have filed for bankruptcy, including fracking pioneer Chesapeake Energy (CHK). Trump took credit for brokering the record OPEC+ production cuts.
    Helima Croft, head of global commodity strategy at RBC Capital Markets, said there is a “political component” to Saudi Arabia’s strategy of slashing shipments to the United States.
    “If you want to show Washington you’re serious about restoring the US-Saudi partnership, that’s a factor in this decision,” Croft, a former CIA analyst, told CNN Business.
    US lawmakers were so incensed by Saudi Arabia’s springtime surge of oil shipments to the United States that some called for Trump to impose tariffs on the kingdom.
    Senator Kevin Cramer, a Republican from North Dakota, where oil and gas is a major driver of the state’s economy, even urged Trump in April to “prevent” Saudi oil tankers from unloading in the United States.

    Not too hot, not too cold — for now

    But talk of punishing Saudi Arabia has vanished now that crude prices have rebounded, albeit only to a sorta-kinda happy medium. At $43, crude is still well below the recent high of $76 in October 2018.
    “This current price range serves President Trump well. It’s still low so it’s good for consumers,” said RBC’s Croft. “And he can point to where prices have moved up from to say, ‘Look what I’ve done for US producers.'”
    As the CNN Business recovery tracker shows, the US national average gas price stands at $2.22 a gallon. That’s well above the April low of $1.77 but lower than before the pandemic erupted.
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    “The most amazing thing about President Trump is he went from being a critic of OPEC because he was focused on the US consumer,” Croft said, “to being the champion of collective output action in defense of the US energy producer.”
    Trump and Big Oil will be happy to learn that Saudi Arabia is continuing to steer tankers away from US shores.

      Few ships carrying Saudi crude will reach the United States before October. September’s imports from Saudi Arabia are on track to plunge by another 47% to just 140,000, according to preliminary estimates by ClipperData.
      Of course, if Saudi Arabia holds back so much crude that gasoline prices rise toward $3 a gallon again before the November election, expect Trump to change his tune.
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