There is already too much oil…
Let us also remember that global oil production capacity already exceeds demand. It is for this reason that OPEC + countries, including Saudi Arabia and Russia, are voluntarily reducing their production of black gold. Indeed, these producers are aware that “pumping” at full capacity would cause the price of a barrel to fall.
American producers also know that a sharp increase in their production would lower crude prices. It is therefore likely that they prefer to produce a little less, but at a higher price. Finally, note that US oil production reached a historic record under Joe Biden, despite criticism of him from the oil industry. The Democrat therefore did not put obstacles in the way of the oil industry.
In terms of natural gas, the impact of Donald Trump's return could be more significant. As a reminder, Joe Biden had frozen the granting of new permits for the export of liquefied natural gas (LNG). The Democrat justified this decision in part for environmental reasons. “There is no doubt that one of President Trump's first actions will be to remove Biden's freeze and expedite permitting.”estimates Anne-Sophie Corbeau, from Center on Global Energy Policy. With what consequences? Remember that the United States has become the second supplier of natural gas to the European Union, while the latter has reduced its dependence on Russian gas. This additional supply of American LNG could therefore facilitate supply to Europe in the medium term.
Nevertheless, permits have already been granted for new LNG projects being built in the United States. The “thaw” of permits, if implemented by Donald Trump, would therefore only have a longer-term impact.
Energy transition under Biden: a green revolution slowed down by oil?
No more tax credit for electric cars?
Furthermore, what fate will Donald Trump reserve for theInflation Reduction Act (IRA), the massive support plan for green energies put in place by Joe Biden? According to Jason Bordoff, Center on Global Energy Policythe $7,500 tax credit for the purchase of electric vehicles, as well as support for renewable energy, are the two most vulnerable measures of the IRA.
But, despite Donald Trump's past statements, it is not certain that he wants to completely dismantle the IRA. “Investments sparked by the IRA, particularly in battery production factories, overwhelmingly benefited Republican statesspecifies Jason Bordoff. This led a group of Republican lawmakers to call on the president not to repeal the IRA.. In addition, consultant ICIS notes that employment in the production of wind turbines, photovoltaic panels and batteries increased by 4.2% in the United States in 2023, a pace higher than the average increase in job creation. jobs. Donald Trump, cantor of Made in Americawill probably not want to attack the IRA measures which favored these job creations.
Why is renewables suffering on the stock market?
However, many shares of companies active in the energy transition suffered following the announcement of the results of the presidential election. Thus, the shares of wind turbine manufacturer Vestas and offshore wind farm developer Orsted lost around 13% on Wednesday. It must be said that, according to some experts, a partial revocation of the IRA could have a significant impact on the development of renewable energies in the United States.
In addition, Donald Trump had already made it known that he was not a big fan of offshore wind turbines… Enough to explain the poor stock market performance of Orsted and Vestas on Wednesday. Especially since the announced increase in customs tariffs could increase the cost of green technologies (photovoltaic panels, wind turbines, etc.) in the United States.
American election: What can we expect from financial markets under Trump 2?
Furthermore, the Republican could want to ease the environmental constraints weighing on gas-fired power plants.
However, the ICIS consultant points to an element which could slow down the Republican in his desire to lift the environmental constraints weighing on industry and electricity production. The European Union has decided to implement a carbon tax at borders, from 2026. Via this mechanism, imports of products such as steel or cement will be subject to a tax linked to carbon dioxide emissions. greenhouse associated with their production. To remain competitive on the European market, US exporters will therefore not be able to do anything in terms of carbon emissions… Not to mention that this European border tax could give ideas to other regions of the world.
