By Collin Eaton and Russell Gold 

A fleet of tankers full of Saudi oil is slowly making its way to the U.S. Gulf Coast, threatening to worsen an already historic oversupply of crude.

The Saudi crude, about seven times as much as the Gulf Coast took from the country in a typical month last year, will fill rapidly dwindling places to store oil, depress already low prices in key shale regions and increase pressure on drillers from Texas to North Dakota to shut off their wells.

"We're going to have some very severe short-term pain," said Mark Papa, the ex-chairman of Centennial Resource Development Inc. and former chief executive of EOG Resources Inc.

These tankers were loaded in March and early April when Saudi Arabia was pursuing a strategy of increasing its output to drive down prices and increase its share of key markets. Since then, the U.S. brokered a deal with nearly two dozen countries, including Saudi Arabia, for a historic cut to world-wide oil production. The aim is to raise prices and stabilize oil markets.

Nonetheless, the 20 tankers holding a combined 40 million barrels of crude are still headed to ports in Louisiana and Texas, according to shipping sources and market intelligence firms Vortexa Ltd. and Kpler Inc. They are due to arrive in Texas and Louisiana through late May.

"This is the American energy producers' Pearl Harbor. We know the ships are coming in, and yet nobody is doing anything about it," said Kirk Edwards, president of West Texas oil company Latigo Petroleum LLC. "Every barrel they're bringing in on those ships backs out a barrel of oil produced here in the Permian Basin."

The slowly unfolding situation has begun to capture the attention of U.S. politicians, some of whom are calling for the U.S. to consider embargoes or other measures to stop the influx of oil. Sen. Kevin Cramer of North Dakota has expressed frustration that Saudi Arabia would flood the U.S. market with discounted crude at this moment.

"Don't let them unload on American soil," the Republican lawmaker tweeted last week. He later exhorted President Trump to do all he could to convince Saudi Arabia to route its oil elsewhere.

President Trump is monitoring the situation and has said all options are available in stabilizing energy markets, a senior administration official said.

One possibility for the president would be to impose tariffs, but observers said that is unlikely following the recent oil deal. Francis Fannon, the U.S. State Department's most senior energy official, said tariffs remain an option for the president, but "he consistently said it was a lever he didn't think he would need to pull."

The state-run Saudi Arabian Oil Co., known as Saudi Aramco, declined to comment.

The American Petroleum Institute, a powerful industry trade group, opposed any interference in free trade for oil. "That's actually the last thing we need," said Frank Macchiarola, the group's senior vice president of policy, economics and regulatory affairs. "Reliance on foreign or imported crude is important for refineries."

A substantial majority, if not all, of the crude coming from Saudi Arabia had buyers, market sources said.

The industry is already facing a massive oversupply of crude, driven by a historic drop in demand as billions of people stay home to counter the spread of the coronavirus.

U.S. crude inventories rose by 19.2 million barrels last week, according to the Energy Department, and the benchmark U.S. oil price Thursday was at $19.87 a barrel, the lowest in 18 years. At trading hubs in the Gulf Coast, Permian Basin in West Texas and the Bakken Shale of North Dakota, crude traded for significantly lower. In the Bakken, prices fell below $10 a barrel as sellers outnumbered buyers.

Some companies have begun shutting in wells whose oil has nowhere to go. Cimarex Energy Co. Chief Executive Thomas Jorden said pipeline companies already have asked the Denver-based driller to make voluntary output curtailments amid storage constraints, even offering breaks on transportation fees.

"We would rather shut in some of that production than continue to produce at these prices," Mr. Jorden said.

The Saudi oil surge is set to exacerbate that glut, starting with the supertankers Awtad, Jana, Aslaf and Lulu, carrying 2 million barrels apiece, which are on track to arrive this month, according to vessel-tracking data.

Most of the tankers are set to arrive in May, bringing almost 32 million barrels to Texas and Louisiana ports, though some may still change their destination. It would be the largest month for Gulf Coast imports of Saudi crude in more than six years, according to Vortexa's forecast and Energy Department import data.

However, this might be the last surge of Saudi crude to head to the U.S. Gulf Coast for a while. Following a 23-nation agreement to cut crude production, Saudi Arabia on Monday raised the price of oil it sells to U.S. refiners, making it less attractive to buy, while it cut prices to Asia.

Timothy Puko contributed to this article.

Write to Collin Eaton at collin.eaton@wsj.com and Russell Gold at russell.gold@wsj.com

(END) Dow Jones Newswires

April 17, 2020 06:44 ET (10:44 GMT)