Harold Hamm: Saudis view US oil as economic threat
Billionaire oilman Harold Hamm told CNBC on Friday that OPEC has been trying for decades through price wars to crush U.S. crude production. "Sometimes they're successful. This time we hope they're not," he said.
The American shale oil boom is viewed by Saudi Arabia as an economic threat, the founder and chief of Continental Resources said in a "Squawk Box" interview. "I think the Saudis have made up their mind they're not going to bear the brunt of a cut, so they force everybody else to do it." As a result, Hamm argued the OPEC cartel—of which the Saudis are the largest producer—is "not very strong at all" nowadays.
But the fallout from Saudi Arabia's hard line on production has turned the Russian "ruble into rubble," while also putting the squeeze on U.S. producers, he said. "All we can do as a company is cutback and cut capex [capital expenditures]."
U.S. oil prices—measured as West Texas Intermediate crude—have fallen more than 50 percent since June. But WTI has a chance Friday on the last trading day of February to avoid an eighth straight monthly decline should crude settle higher. Prices were off to a strong start in early trading Friday. The number to watch is $48.24 a barrel—the settlement level on January's last trading day.
Even with the lower oil prices, Hamm has been a vocal advocate of overturning the 40-year ban on U.S. producers from exporting crude. He's optimistic about the chances. "I think it could be done away with by executive order. I would expect the president to do that."
Earlier this month, Rep. Joe Barton unveiled a bill to remove the export restrictions. The Texas Republican said at the time that "pressure to remove the ban on crude oil exports is growing from both ends of the political spectrum."
Whether full oil exports are eventually allowed, Hamm said the U.S. might be able to start really weaning itself off foreign exports. "We should be energy self-sufficient in five years, by 2020, in this country. We're only about 5 million barrels [a day] away from that."