If there’s one thing President Donald Trump likes almost as much as big economic deals, it’s low gas prices.
His current trip to the Gulf states is bringing those two goals into conflict.
It’s a massive number: At $1 trillion, the investment would be equivalent to the entire value of Saudi Arabia’s sovereign wealth, or the nation’s GDP. For the nation to be able to sustain that level of investment in the U.S. long-term, it would likely require hiking currently-low oil prices—a prospect sure to anger Trump.
Brent crude, the international benchmark, is currently trading at about $65 a barrel. That price was $79 in January, when Trump took office—a number the president thought was too high.
How long that price stays low remains to be seen.
To be sure, Saudi Arabia can afford some short-term deficit spending, but it will likely look to close the gap, either by cutting back projects, selling assets, or raising taxes, Soussa said.
During Trump’s first term, “there were a lot of promises that didn’t come to fruition,” Johnson said. “But that is kind of the nature of the business: If you’re making big investments, they don’t happen overnight.”
