It’s a brand new day, folks. With the election of Donald Trump as President of the United States (admit it, you were surprised no matter how you voted), it’s only natural to wonder what lies in store for the oil and gas industry in the next four years. Trump has spent a lot of time in the last several months doing his very best to befriend high-ranking members of the industry, so there’s nothing to indicate that good times aren’t on the horizon. However, President Trump will have to fight something of an uphill battle if he’s going to repair an already ailing industry.
Once it became clear that Donald Trump was going to win the US Presidential election, oil prices dropped and then quickly rebounded, causing a tremor throughout the industry. That said, the drop may not actually be the Donald’s fault. Historically speaking, stocks are always tumultuous in the months surrounding an election, so the biggest barometer for future success will lie in Trump’s ability to carry through on his previous plans for the oil and gas industry.
The OPEC of It All
The fourteen countries that make up the Organization of the Petroleum Exporting Countries are going to be in for a rough few years if Trump carries through with his energy plan. According to Pulitzer Prize-winning U.S. oil historian Daniel Yergin, things are extremely uncertain at this point.
If Trump increases U.S. oil output as he has proclaimed, then it may cancel out OPEC’s impending plan to curtail oil production in the hopes of reducing the current world surplus of oil and driving the price of oil higher. Experts predict that this move may work well for the United States initially, but the plan might cause problems for the world economy in the long term.
Things Might Be Getting Busier in Oil and Gas
In the past, Trump has stated that one of his goals as President would be to turn America toward increased self-sufficiency. In terms of oil and gas, that would mean breaking ties with OPEC and relying much more heavily on domestic oil and gas projects. That would mean a boost to American oil and fracking projects across the board.
Given the United States and Canada’s incredibly intertwined energy policies during the Obama administration, some Canadian officials are curious as to how the relationship will proceed, though if President Trump carries through with his plans, it’s not inconceivable that new pipelines will begin construction as Canadian oil companies continue their solid working relationship with the United States.