The oil industry could see benefits from two new lending programs
As the oil industry faces issues in the midst of the pandemic, the administration is discussing ways to help struggling oil companies.
Two new potential lending programs that will directly benefit the oil industry are currently in the works.
The first through the Treasury Department would provide bridge loans to smaller players, while the second would offer emergency lending authority through the Federal Reserve.
Energy leaders said they're confident Treasury Secretary Steve Mnuchin will support these efforts.
Some bankers, however, are weary of giving loans to a struggling industry right now, but Secretary of Energy Dan Brouillette said the oil industry's problems will not last long-term.
“As history will show, these events tend to be more short-term in nature. Now the country is on the verge of reopening and we fully expect that the demand signal for crude, the demand signal for refined products, it's going to come back,” said Brouillette.
Sen. Kevin Cramer, R-N.D., said reopening efforts are the obvious first steps, but fixing oversupply issues and ensuring CARES Act funding is flexible enough to reach producers are also vital next steps.
Political analysts said the assistance could hit a roadblock with Democrats, citing a letter signed by nearly 40 congressmen urging Mnuchin not to use relief money to help oil companies.