Newly elected President Donald Trump is declaring a state of emergency for both immigration and energy. He wants to fulfill his election promise of "drill, baby, drill" and sell the extra oil not only domestically but also to allies. To European countries, for example, which, according to Trump, can avoid high import tariffs if they buy American fossil fuels.
Trump is once again withdrawing from the Paris Climate Agreement and wants to increase energy production and tap new gas fields and oil wells. How smoothly Trump's 'drill, baby, drill' will be put into practice remains to be seen.
The U.S. oil industry is already at record highs, and the U.S. oil sector is not exactly jumping to pump more oil, especially now that oil prices are under pressure. The U.S. Energy Agency (EIA) said in a report on Tuesday that it expects lower oil prices to hamper drilling and investment in U.S. crude production.
In the short term, the plans are having an effect on the oil price. On Wednesday 15 January, Brent crude oil was at a provisional high since 82,03 August at $12. Since then, the price has been falling and at the time of writing (Wednesday afternoon 22 January) it is $79,19 per barrel.
The EIA forecasts oil prices to fall from an average of $81 per barrel in 2024 to $74 per barrel in 2025 and $66 per barrel in 2026, as strong global production growth and slowing demand growth put downward pressure on prices, offsetting upward pressure from geopolitical tensions and OPEC+ members’ voluntary production cuts. It should be noted that the forecast was completed before the US imposed additional sanctions on Russia’s oil sector on 10 January, which could negatively impact the country’s oil exports.
Demand from China is still lagging. State-owned China National Petroleum Corporation (CNPC) has published an outlook predicting that Chinese oil imports will grow by just 1% this year.
Trump, in line with his other policies, is looking inward. "An affordable and reliable domestic energy supply is a fundamental requirement for the national and economic security of every country," Trump said in the executive order. Moreover, Trump said that in expanding the energy infrastructure, the United States can sell additional energy to international allies in addition to using it domestically.
Israel and Hamas ceasefire
Meanwhile, the ceasefire between Israel and Hamas has been (largely) holding since Sunday. However, an army invasion of the West Bank has cost the lives of several Palestinians. The ceasefire is fragile, but for now it provides relative peace in the area.
The Iranian-backed Houthi rebels in Yemen have said that, in light of the ceasefire, they will only attack Israeli-owned or Israeli-flagged ships. They did threaten that if violence is used against Yemen by Israel, the US or the UK, British and American ships will also be targeted. More oil tankers may venture into the Red Sea in the coming period, sailing to Europe via the Suez Canal.