Donald Trump wants America to dominate the global oil market. But his plans to boost production come as global demand for oil has weakened.
Amid the spate of appointments to the incoming Trump administration announced over the past few days are two that have the president-elect and the US oil industry quite excited.
Trump’s expectations for US oil and gas production are ambitious but likely unrealisable - at least during his presidency, but probably also beyond.Under the Biden administration, US oil production is already at record levels and, while the rate of growth in production has been slowing, output is expected to be even higher next year.
The International Energy Agency has forecast a surplus of supply over demand of a million barrels a day next year, with non-OPEC producers alone adding 1.5 million barrels a day but demand only rising by 990,000 barrels a day. The external environment could get worse. The US industry is nervous about Trump’s proposed tariffs, particularly tariffs on steel imports, which could drive up input costs and lower global growth -- particularly if America’s trade partners retaliate -- even as oil prices are under pressure.
Iran’s major export customer, however, is China, which has shown with its imports of Russian oil that it isn’t deterred by sanctions. And like Russia, Iran has built a shadow fleet of tankers to transport its oil and circumvent sanctions.
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