West Palm Beach, Fla. (Oct. 25, 2024) – Analysts are bracing for shifts in the oil and gas sector amid Donald Trump’s projected return to the White House, with the former president poised to introduce policies that could alter the regulatory landscape in favor of oil producers.
However, escalating tensions with Iran could disrupt oil exports, potentially leading to a hike in prices, experts warn.
Trump’s potential presidency, expected to prioritize deregulation, is viewed as largely favorable for U.S. oil and gas industries.
Yet, this potential upside could be undercut by international strain, notably with Iran, which remains a significant oil exporter.
Trump’s re-imposition or intensification of sanctions on Tehran could have far-reaching effects on global oil prices, creating a complicated landscape for domestic and international energy markets.
Industry Optimism and Caution: Mixed Expectations for Oil Companies
Patrick De Haan, head of petroleum analysis at GasBuddy, expressed a cautiously positive outlook. Taking to X, formerly Twitter, he described a second Trump term as a “net positive” for the oil industry.
Citing probable rollbacks of strict energy regulations, De Haan underscored the potential for easing compliance burdens on producers, possibly lowering production costs.
However, De Haan cautioned that increased sanctions targeting Iranian oil exports could tighten global supply, thereby pushing prices higher. “Could be bad for prices,” he said, noting the potential for these sanctions to place an added strain on oil markets.
Phil Flynn, a senior analyst at Price Futures Group and contributor to Fox Business, also highlighted the delicate balance that could emerge.
Iran, which exports approximately 1.7 million barrels of oil daily, plays a critical role in the global supply chain. “If these barrels are removed from the market, it’s going to have to be made up somewhere,” Flynn explained, pointing out the impact this could have on U.S. refining capacity.
Challenges in U.S. Refining Capacity
According to the Energy Information Administration (EIA), U.S. refining capacity reached its peak in 2020 at nearly 19 million barrels per day, before a reduction in the following years.
While the industry has seen a slight recovery in 2023 and 2024, current capacity remains below pre-pandemic levels, averaging around 18.38 million barrels daily.
The recent closure of a Phillips 66 refinery in February further impacts production capacity, though this effect is not yet reflected in the EIA’s annual data.
Flynn emphasized that if Iranian barrels are withdrawn, the resulting loss could lead to increased prices and widen the global supply gap.
While OPEC might attempt to offset the deficit, U.S. oil and gas could also play a role, albeit with challenges due to slowed federal leasing and inflation impacting production costs.
“The lack of new leases and inflation makes it harder for U.S. oil and gas to fill that void,” Flynn noted, addressing the federal land policies in place.
Gas Price Trajectory: Experts’ Skepticism on Cost Reduction Promises
Energy analysts remain cautious regarding Trump’s campaign pledge to reduce energy costs by half, with De Haan expressing doubts about its feasibility.
Instead, he anticipates that gasoline prices could stay around $3 per gallon during the summer, potentially dipping below $3 toward the year’s end.
“This seems to be the new norm,” De Haan remarked, adding that simplified gasoline standards could eventually help to stabilize or reduce costs over time.
Presently, the average price for a gallon of regular gasoline in the U.S. stands at $3.12, a slight decline from last year’s $3.42.
The promise of reduced costs through streamlined standards remains speculative but could serve as a gradual relief for consumers.
Election Results: Trump’s Path to Victory in Battleground States
As of early Wednesday, preliminary results and projections suggest Trump is on the path to securing 270 electoral votes, blocking the reelection bid of Vice President Kamala Harris.
Trump is leading in the pivotal battleground states of Pennsylvania, Georgia, and North Carolina, with the Associated Press calling victories for Trump in these critical regions.
According to AP’s results, Trump has secured 267 electoral votes, compared to Harris’s 214, with counting ongoing in additional battleground states, including Arizona, Michigan, Wisconsin, and Nevada.
The U.S. electoral system designates 538 electoral votes, requiring candidates to garner a minimum of 270 for victory.
Should both candidates win states traditionally aligned with their respective parties, Harris would fall 44 electoral votes short, while Trump would be 51 votes shy, leaving the outcome to these key swing states.
Historically, Pennsylvania, Michigan, and Wisconsin – known collectively as the Rust Belt – have served as Democratic Party strongholds, yet shifts in these states’ loyalties could mark a significant turning point in this election.
Voter Sentiments: Key Issues Driving the Polls
Exit polls highlighted the state of democracy, economic concerns, and abortion rights as pivotal factors influencing American voters this election cycle.
CBS News exit polls indicated that nearly 60% of voters prioritize the state of democracy, with five percent ranking abortion as a primary concern.
Economic stability also emerged as a significant factor, with over one in ten voters identifying it as their main issue.
CNN’s exit polls revealed a general discontent with the nation’s trajectory, with around three-quarters of the electorate expressing a negative outlook on current U.S. conditions.
A mere quarter of voters expressed satisfaction, while 40% reported dissatisfaction, and nearly 30% characterized their sentiment as anger.
Despite these feelings, optimism about the nation’s future persists, with six out of 10 voters believing America’s best days lie ahead.
This outlook reflects a prevailing hope among Americans for a brighter future, contrasting with the concerns shared by many over the current state of affairs.
In his projected victory speech in West Palm Beach, Fla., Trump declared, “This will be the golden age of America… America has given us an unprecedented mandate.”
With his projected return to office, Trump’s administration could reshape both domestic energy policy and the broader geopolitical landscape, leaving both energy analysts and voters to anticipate the changes ahead.
