Donald Trump’s first speech as the 47th president of the United States featured a variety of slogans he used during his presidential campaign, including “Drill, baby, drill,” as his administration It suggested pushing for increased oil and gas production and oil production. Consumption in the United States. President Trump said he would declare a “national energy emergency” to increase U.S. oil and gas production and lower prices, and also announced that the U.S. would expand energy exports.
The U.S. president’s comments immediately after taking office could lead to further downward pressure on oil prices. Indeed, oil prices fell slightly after President Trump’s inaugural address, even as the market awaited details of the executive order regarding the “energy emergency.”
Lower oil prices will be good for India, which is the world’s third-largest oil consumer and relies on imports for more than 85% of its oil needs. Additionally, the US is already India’s fifth largest supplier of crude oil, and increased US oil exports could further benefit India.
The Indian economy’s high dependence on imported crude oil makes it vulnerable to fluctuations in global crude oil prices, as well as affecting its trade deficit, foreign exchange reserves, rupee exchange rate, and inflation.
“The (U.S.) inflation crisis was caused by massive overspending and soaring energy prices. Therefore, today I am declaring a national energy emergency. Drill, baby, drill. America… We will be a manufacturing nation again. And we have something that no other manufacturing nation has: more oil and gas than any other country on earth. And we will use it. “I intend to,” President Trump said.
“We will lower prices, max out our strategic (oil) reserves again, and export American energy around the world. We will be a rich nation again, and it will help us do it at our feet.” It’s liquid gold in America,” Trump said, adding that he would also cancel what he called the “electric vehicle mandate,” a policy of President Joe Biden’s administration. Policies to promote the spread of electric vehicles.
Although it is too early to say what President Trump’s second term will actually mean for global oil markets, industry observers expect the Trump administration’s economic and energy policies to put downward pressure on oil prices. . China is the world’s largest oil importer, so his plan to impose high tariffs on imports, especially those from China, could have a negative impact on global oil demand if strictly implemented. There is.
Additionally, President Trump’s push to significantly increase U.S. oil production, and even exports, could increase global oil supplies and drive major oil producers to compete for market share, causing prices to rise again. There may be downward pressure.
But realistically, new approvals in Washington would be a near-balanced move to keep oil prices in check while avoiding a sharp drop or collapse, since it would also make production impossible for U.S. oil producers. is likely to drive a global oil market. And while President Trump has promised voters he will drastically reduce U.S. energy bills, the White House itself has limited means to significantly swing oil prices.
S&P Global Commodities Insights (SPGCI) said in a November note that oil buyers in Asia, including India, have an opportunity to import “attractively priced U.S. crude oil” due to competition from OPEC (Organization of the Petroleum Exporting Countries). He said he expected the number to increase significantly. Suppliers in oil exporting countries are strengthening.
Rising U.S. oil production has become a significant challenge for OPEC+ (OPEC and other partners) in recent years, exerting downward pressure on prices, threatening the bloc’s market share and prompting large-scale production cuts. Analysts say the impact of OPEC+ production cuts in 2024 has been largely negated by increases in U.S. production, as well as increases in other non-OPEC+ countries such as Brazil, Guyana and Canada, according to SPGCI.
Commodity market analysis firm Kupler believes President Trump could strongly support U.S. oil and gas producers, pursue aggressive energy infrastructure policies and try to ease emissions standards.
“Despite expectations that U.S. oil production growth will decline significantly next year, President Trump continues to implement policies that support oil and gas drilling, even if the impact of these measures is small. President Trump plans to speed up the issuance of permits for drilling on federal lands during the campaign. President Trump has repeatedly announced his intention to roll back regulations that impede oil and gas drilling. “We are likely to consider rescinding the executive order of the era,” Kepler previously said.
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