At the time of writing, the result of the 2020 US Election is poised on a knife edge, with both Donald Trump and Joe Biden creeping towards that magical electoral college state vote figure of 270. The race run has been much closer than any were expecting, and whilst the finalised results may still be some days off yet (with federal law pertaining to which postal ballots are counted varying from state to state), the entire USA (the oil industry, in particular) is on tenterhooks.
Regardless of how quickly we know who the next POTUS will be, however, one question remains foremost across the world’s markets. What impact would each candidate have on the oil industry, moving forward? The team here at TriStone Holdings Ltd, an emerging UK oil investment company, wanted to explore exactly that. So whether we end up knowing within the coming days, weeks or even months, where does the oil industry sit?
Perhaps the easier of the two candidates to examine is Donald Trump, given that he’s the incumbent president. Of the two, Donald Trump is certainly more supportive of the O&G sector than his opponent. Under Donald Trump’s tenure, the US oil industry has done comparatively well, with US crude exports showing an almost continual growth between June 2017 and July of this year. This boom in exports has arisen from the so-called shale oil revolution, and for President Trump, bolstering that industry position would be of critical importance should he retain his position for the next four years.
Trump has spoken (and tweeted) at length about the demonstrable impacts his oil policies have had on the sector, and the deal he helped Russia and Saudi Arabia draft in the midst of the pandemic, certainly steadied the ship, so to speak. However, there’s also some debate as to how helpful the president has actually been, particularly for operators on the ground, with certain shale-producing areas damning in their condemnation of the president for his lack of financial support over the past few months. Federal loan exclusions left oil operators feeling alienated and abandoned, which if not dissuaded their support for the current president, then it certainly might have dampened it.
As is perhaps unsurprising for a democrat candidate and their more natural leanings towards the left, Joe Biden has made clear the importance in his eyes of shifting to towards cleaner energy; in fact, his climate plan explicitly states that as president he would lead the U.S. to a 100% clean-energy economy and net-zero emissions no later than 2050. Clearly, this would hugely impact the US crude industry, and it’s amongst the leading reasons just why Biden struggles so much to win over any kind of voting support from within the oil and gas industry.
His pledges have extended to a proposed ban on new shale projects; the American Petroleum Institute stated in a report earlier this year that a federal leasing ban for natural gas and oil development could result in a cumulative GDP loss of $7.1 trillion by 2030 – an eye-watering sum no matter how large the industry.
What sums up Biden’s stance on the industry perhaps more than anything else, though, has been the senator’s commitment that his campaign ‘Biden for President’ wouldn’t accept contributions from oil, gas and coal corporations. The democrat has certainly nailed his colours to the mast when it comes to his stance on energy and fuels.
Not All The Industry Is Anti-Biden
That said however, some prominent industry voices have put their heads above the parapet in a quasi-support of Biden; various producers in Texas have concluded that Biden’s plan leaves room for oil and gas, and certainly previous democratic administrations have worked productively with the sector. So, what at first glance might seem a clear-cut difference in stances is actually much more nuanced.
Current Oil Industry Market Volatility
Major global elections often impact upon the markets, though perhaps few see as tumultuous an impact as when it comes to the turn of our friends across the pond. As it stands, oil markets worldwide are see-sawing by the hour, with the uncertainty of the election result unquestionably the leading factor. It’s just too hard to call at the minute, and as an oil investment company, all we can do is sit back, wait and maybe get out a bucket of popcorn to watch the drama unfold. If one thing is for certain, though, it’s that the oil and gas sector is in unknown waters.
Contact TriStone Holdings Ltd
Regardless of what happens, it’ll be incredibly interesting to see just how it affects the oil and gas industry in the near, medium and long-term future. So, if you’d like to find out more about our oil investment company, then get in touch! Contact TriStone Holdings Ltd today on 0800 055 7079 or by emailing us at [email protected]