Will Trump Bring Down Oil Prices?
US President-elect Donald Trump released this video update discussing his policy plans for the first 100 days of his administration on issues of trade, energy, regulations, immigration, ethics reform, and national security.
Perhaps most significantly, Trump pledged to withdraw from the Trans-Pacific Partnership trade deal on day one of his administration. He called” a potential disaster for our country,” and said that “instead, we will negotiate fair, bilateral trade deals.”
“I will cancel job-killing restrictions on the production of American energy – including shale energy and clean coal – creating many millions of high-paying jobs,” he promised.
“That’s what we want, that’s what we’ve been waiting for,” the future President stressed.
He also pledged to deregulate the energy industry and shore up America’s defenses against cyber attacks.
“I will ask the Department of Defense and the Chairman of the Joint Chiefs of Staff to develop a comprehensive plan to protect America’s vital infrastructure from cyber-attacks, and all other form of attacks,” Trump said.
On immigration, Trump said he will direct the Department of Labor to investigate all abuses of visa programs that undercut the American worker.
As part of the plan to Drain the Swamp, Trump plans to impose “a five-year ban on executive officials becoming lobbyists after they leave the Administration – and a lifetime ban on executive officials lobbying on behalf of a foreign government”.
In the end of his speech Trump promised to provide more updates in the coming days.
A senior analyst of ‘Uralsib Capital’, Alexei Kokin, speaking to Vestnik Kavkaza, commented on the possible restriction on the production of hydrocarbons in the United States. He noted that it is mainly an issue of lifting the ban on drilling on some federal lands. “Apparently, it will also accelerate the issuance of licenses to export liquefied natural gas. Probably, some environmental restrictions will be also removed. In other words, of course, it will lead to an increase in oil production and the growth of liquefied natural gas exports from the United States, but, perhaps, in 2-5 years. Of course, it will be a factor of an additional proposal, which has a negative impact on oil prices,” the expert said.
He also admitted that Trump may reconsider an agreement with Iran, which has been achieved by Barack Obama. “In a greater or lesser degree he can aggravate relations with Iran. In this case, there is a risk that the Iranian oil industry will not receive investments, which it is trying to attract now, including from Russia. If Iran does not fully succeed to achieve it, it is quite possible that the country’s oil production will stagnate. With investment, Iran is able to increase its production by 2 million barrels per day. But if the Islamic Republic is not able to return to that level, then these 2 million barrels will enter the market from the United States,” the expert noted.
In addition, he expressed doubt that in the near future the United States will gain full energy independence from foreign supplies of hydrocarbons. “To date, the net imports of crude oil is about a little more than 7 million barrels per day. Russia produces 11 million bpd. The US produces approximately 8.7 million barrels per day. Therefore, there will be certain changes in the market, but they will be very slow,” Alexei Kokin concluded.