The US oil and gas industry stands to benefit from increased investment after the Republican party’s US election victory, according to GlobalData forecasts.
Investment will likely increase in the energy industry and some of Biden’s green initiatives are set to be repealed, it adds.
“This will include expanding permits for the production and distribution of petroleum products, ending Biden’s recent pause on liquified natural gas (LNG) exports, and dropping the US Environmental Protection Agency’s (EPA) emissions standards and regulations, approved by Biden in March 2024,” the company forecasts.
But the return of Trump ‘2.0’ in the White House is likely to send shockwaves through the clean energy industry and impact supply chains.
“Trump will not roll back Biden-era investment initiatives, such as the IRA and the CHIPS and Science Act but will limit resources allocated to their implementation and oversight,” it states.
Source: GlobalData
“Trump’s protectionism may result in the fragmentation of global supply chains, where each country ‘fends for themselves’.”
Trump has proposed 10-20% baseline global tariffs, plus 60% or higher tariffs on Chinese imports.
“Trump’s global tariff threats push the EU closer to China and away from US-China decoupling,” according to its ‘Trump Win’ forecasts.
“The US will likely withdraw from global climate initiatives while shifting domestic clean energy priorities to those favoured by Republicans such as clean hydrogen, CCS, geothermal and nuclear.”
It also believes there will be elimination of regulatory curbs on emissions and clean energy programme, and ‘attempts to roll back the IRA’.
Overall the Republicans will focus on economic nationalism, tax cuts and retribution.
Republican sweep forecasts
- A Republican-majority Congress will support Trump’s more extreme protectionist and anti-climate policies. Trump may try to roll back the IRA.
- A united government would enact a strong fiscal stimulus and aggressive fiscal policy, including larger tax cuts for individuals and a dilution in fiscal regulation. This would make the financial markets nervous and decrease investor confidence in US assets.
- Trump would like to cut non-defense discretionary spending. However, this is unlikely to happen. Even if he cuts spending across social security programs, spending on immigration is likely to increase. To curtail illegal immigration, the immigrant ban will be expanded, and funding to build the border wall between the US and Mexico will increase.
Source: GlobalData
