Oil prices ended lower on Tuesday, after Trump declared a “state of energy emergency” the day before, which aims to boost US hydrocarbon production to reduce the cost of energy and fight against inflation.
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The price of a barrel of Brent from the North Sea, for delivery in March, lost 1.07% to $79.29.
Its American equivalent, a barrel of West Texas Intermediate, for delivery in February, which is the last day of trading, fell by 2.56% to $75.89.
Donald Trump intends to increase oil and gas production, to “fill strategic reserves” and “export American energy throughout the world”, DNB analysts learned from his speech.
“We will drill at all costs,” repeated the Republican, a formula that has become one of his campaign slogans (“We will drill, baby, drill”).
Photo d’archives, AFP
The idea behind this strategy is to help American industry produce at lower costs to contain prices and increase the purchasing power of Americans.
-“This is one of the reasons why prices are bearish today,” Robert Yawger, analyst at Mizuho USA, commented to AFP.
Donald Trump is trying to “increase public pressure on the industry to add barrels to what is already the most production we have ever had,” he summarized.
American production has already reached a record level in 2024, increasing for years, and which exceeds 13 million barrels per day almost every month.
“It is difficult to conceive the notion of “energy emergency”, when the United States produced 13.2 million barrels of crude oil per day in 2024”, which is “more than any other country”, also said noted by AFP Stewart Glickman of CFRA.
The drop in prices could, however, be contained by the prospects of “sanctions against Russia and Iran,” said Volkmar Baur, analyst at Commerzbank, in a note.
According to the analyst, operators are waiting in particular to see “the way in which Trump views the sanctions against Russia recently introduced by the administration of [Joe] Biden».
Oil prices notably jumped on January 10, driven by the announcement of new sanctions from Washington and London against major players in the Russian oil sector.
However, this recent price increase “should prompt Trump to exercise caution in implementing sanctions, […] after all, low energy prices are of great importance for his economic policy program,” Baur emphasized.
