Oil prices rose to $75 per barrel following Donald Trump’s win in the 2024 U.S. presidential election, sparking fresh uncertainty in global markets. This spike is largely driven by concerns over the changes in global economic policies and global warming.
U.S. oil producers are looking forward to crude oil production under Donald Trump presidency, higher oil supply on lower prices. Trump, who was announced Wednesday as the winner of the 2024 election, has also vowed to put more sanctions on Iran in the global market which could become tighter, potentially boosting prices.
At the same time, the increased likelihood of trade wars under Trump could reduce global economic growth and slow oil demand, as the picture for the market’s longer-term outlook is well resolutely positively mixed.
Trump’s term on oil prices is unclear with some short-term downside risk to Iran oil supply and thus upside price risk. Goldman Sachs commodities analyst wrote in a research note Monday. He said, “But medium-term downside risk to oil demand and thus oil prices from.”
Trump expressed his excitement for increased U.S. oil production while giving a speech from the Republican campaign headquarters in Florida, just hours before his victory was confirmed. He was referred to Robert F. Kennedy, Jr., the independent candidate who he said would become a part of his team.
U.S. oil and gas production hit record highs under the Biden administration, which gradually changed its approach to the industry despite campaigning on pledges of environmental stewardship.
Brent crude traded in the $70 to $75 per barrel range, which is lower than what many oil producers seek to balance their costs and budgets amid slowed global demand for oil and growing supply.
Putting more supply on the market would lead to lower prices, thereby decreasing revenues for American producers, said Cole Smead, president and CEO of Smead Capital.
If the Trump administration opens up federal leases for oil and gas, federal lands would get 25 percent per barrel of revenues. You will have a lot of trouble finding an oil company that can make money at $52.50 per barrel with what they have left from a $70 barrel,” Smead said in notes.
