The assessment by Citi strategists on the potential impact of the 2024 US presidential election on oil prices suggests that under a Trump administration, the oil market could experience a net bearish trend. This could be attributed to factors such as trade tariffs, oil-and-gas-friendly policies/deregulation, and efforts to push OPEC+ to release more oil to the market.
On the other hand, if Kamala Harris takes office, the oil market may see a different trajectory. Her energy policies are expected to align closely with those of the current Biden administration, indicating the maintenance or slight increase of regulatory pressures on the oil industry. Additionally, her approach to Iran is likely to be less confrontational, potentially reducing disruptions in Iranian oil exports.
Furthermore, the environmental policies of the respective administrations could also play a significant role in shaping the oil market dynamics. Trump’s potential rollback of environmental regulations and opposition to electric vehicle subsidies may sustain higher oil demand. However, Elon Musk’s endorsement of Trump could moderate this impact. Conversely, Harris is anticipated to support renewable energy initiatives and maintain strict regulations on fossil fuel production.
The impact on oil prices might also extend to infrastructure and regulatory measures. Under a Trump administration, efforts to increase leasing and acreage auctions for oil production could boost domestic supply. Conversely, Harris may push for more stringent regulations under environmental acts, and aim to phase out internal combustion engine vehicle sales by 2035.
From a geopolitics perspective, Trump’s close ties with Saudi Arabia could lead to increased oil supply from OPEC+, potentially lowering prices. Additionally, Trump’s mention of negotiating a deal to end the Russia-Ukraine conflict could also ease the oil and gas markets if successful.
The upcoming 2024 US presidential election has the potential to significantly impact oil prices depending on the administration that takes office. While a Trump administration could result in a more bearish oil market due to policies favoring the oil industry, a Harris administration may maintain regulatory pressures and support renewable energy initiatives. Geopolitical factors and environmental policies will also play a crucial role in shaping the future of the oil market.