Citi said in a research note on Thursday that a Donald Trump presidency could be net bearish for oil prices because of a combination of factors, such as tariffs and policies that favor oil and force the Organization of the Petroleum Exporting Countries and allies (OPEC+) to release more oil into the market.
“Trump could move back natural strategies, however comprehensively upsetting the (Expansion Decrease Act) looks far-fetched because of its positive effects in red states,” experts noted, alluding to states that are Conservative leaning.
The primary bullish gamble for oil markets under a Trump administration would be would be tension on Iran, they added, however this might have a restricted effect. Iran’s oil exports could be affected by 500-900,000 barrels per day if Trump resumes his campaign of “maximum pressure” on Iran. U.S. Following growing pressure from his fellow Democrats, President Joe Biden abandoned his reelection bid on Sunday and endorsed Vice President Kamala Harris as the party’s candidate for the election in November.”
According to Citi analysts, a Harris administration may be similar to or slightly left of Biden. Geopolitical, cyber, and weather-related risks persist in the market. “The hurricane season is far from over; fighting continues in Gaza, the West Bank, Lebanon, Syria, and Yemen, raising Middle Eastern tensions. However, there has also been increasing pressure for a ceasefire campaign, which may occur this summer,” Citi added.
