Bloomberg

Whatever policies he ultimately pursues, Donald Trump’s return to the White House looks certain to send shock waves through global energy markets.

In his victory speech, the president-elect said he’d take charge of any decisions relating to “liquid gold,” a pledge that oil traders see as bearish. International benchmark Brent fell below $75 a barrel, and there are plenty of reasons to explain why.

Trump’s threats of 200% tariffs on imports from China could unleash a trade war and deliver a fresh blow to already-faltering global oil demand. The stronger dollar that emerged in recent weeks is also curbing the appeal of commodities.

His campaign mantra of “drill, baby, drill” implies support for the shale oil industry, and that may translate into an increase in leasing and acreage auctions. Still, many analysts are skeptical it would have a material impact on US production, which already is at a record.

Trump may also rekindle his camaraderie with Middle East producers such as Saudi Arabia, healing the rifts of the Biden administration, and thus encourage the OPEC+ cartel to add more barrels.

His admiration for President Vladimir Putin might lead to an easing of the sanctions imposed on Russian shipments after the invasion of Ukraine. Failing that, Trump could revive the flurries of tweets he once used to scold OPEC+ nations for keeping crude prices high.

The ripples of his next term likely will extend far beyond oil.

Trump’s previous administration dubbed America’s hydrocarbon riches “freedom molecules,” and he vowed to renew the issuing of permits for liquefied natural gas export projects that President Joe Biden halted.

His doubts about climate change and hostility toward the Paris Agreement are well-documented.

But there also are reasons why Trump’s comeback may be bullish for energy prices. Top of these is the prospect of another “maximum pressure” campaign on crude shipments from Iran, previously deployed to force Tehran into accepting further restraints on nuclear research.

Finally, there’s the energy wild card: whatever role in the administration that may be played by enthusiastic backer Elon Musk, chief executive of the world’s most famous electric-car company.

–Grant Smith, Bloomberg News