A second Donald Trump presidency, commencing Monday, January 20, 2025, will significantly reshape the global oil and gas markets through a series of policy shifts and executive actions that he is planning to sign.
The market has been rife with uncertainty in the weeks leading up to his inauguration, as reports surfaced about sweeping changes Trump intends to implement, including a potential end to the moratorium on U.S. liquefied natural gas (LNG) export licenses imposed by President Biden.
Trump’s “Drill, Baby Drill” campaign has been central to his energy strategy, aiming to boost domestic oil and gas production as a key pillar of economic growth.
Repealing the LNG moratorium is expected to align with his broader efforts to achieve “energy dominance.”
Market movements ahead of Trump’s inauguration
Global oil prices dipped early Monday, prompting cautious sentiment among U.S. energy market players. Brent crude futures and U.S. WTI crude saw marginal declines after both benchmarks recorded over 1% gains the previous week. These gains were fueled by the Biden administration’s sanctions on over 100 tankers and two Russian oil producers, creating a scramble for supply among top importers like China and India and spurring demand for unsanctioned vessels to transport Russian and Iranian oil.
Analysts anticipate Trump’s administration will ease restrictions on Russia’s energy sector, potentially offering sanctions relief in exchange for a deal to end the Ukraine war. Such measures could stabilize global oil supply by mitigating the impact of ongoing sanctions and alleviating concerns over supply disruptions.
Economic optimism and U.S. oil production
The return of Donald Trump to the White House has injected optimism into the global oil market, with expectations of an improved economic outlook. Trump has pledged to expand drilling and exploration licenses, reversing Biden-era policies that curtailed new drilling on federal lands. An increase in U.S. oil production is expected to contribute to a global surplus, potentially driving down prices in the near term.
Global oil demand and production outlook
Global oil demand surged in the fourth quarter of 2024, rising by 1.5 million barrels per day (mb/d) year-on-year—the fastest growth rate since Q4 2023.
Factors such as lower fuel prices, colder weather across the Northern Hemisphere, and abundant petrochemical feedstocks fueled this demand. For 2024, oil demand grew by an estimated 940,000 barrels per day (kb/d), with further acceleration to 1.05 mb/d expected in 2025.
On the supply side, the International Energy Agency (IEA) projects global oil production to increase by 1.8 mb/d in 2025, with non-OPEC+ suppliers, including the United States, Brazil, Guyana, Canada, and Argentina, contributing a significant 1.5 mb/d.
Corporate adjustments to political shifts
The incoming Trump administration’s pro-oil stance is already influencing corporate behavior, with companies adopting more cautious approaches to environmental commitments to avoid potential political repercussions.
This trend underscores the broader impact of Trump’s policies, which are likely to slow the global transition to renewable energy.
Trump’s second presidency is expected to boost U.S. oil and gas production, reshape global energy supply dynamics, and alter corporate strategies. However, it also brings uncertainties about the long-term impact on environmental policies and international climate efforts.
