(Reuters) – A Donald Trump presidency could be net bearish for oil prices due to a combination of factors, including tariffs and oil-friendly policies, and pushing the Organization of the Petroleum Exporting Countries and allies (OPEC+) to pump more oil to release the market, Citi said in a research note on Thursday.
“Trump could reverse environmental policies, although it seems broadly unlikely given the positive effects in red states,” analysts noted, referring to states that lean Republican.
The biggest bullish risk to oil markets under a Trump presidency would be pressure on Iran, she added, although this could have limited impact. If Trump were to resume a “maximum pressure” campaign on Iran, the market could experience an impact of 500 to 900 thousand barrels per day on Iranian oil exports.
US President Joe Biden on Sunday abandoned his re-election bid and endorsed Vice President Kamala Harris as the party’s candidate for the November election, after mounting pressure from his fellow Democrats.
“A Harris administration could be similar to, or slightly to the left of, Biden,” Citi analysts said.
Meanwhile, the market continues to face geopolitical, cyber and weather-related risks.
“Hurricane season is far from over – tensions remain high in the Middle East, with fighting in Gaza, the West Bank, Lebanon, Syria and Yemen. However, pressure has also increased for a push for a ceasefire, which could happen this summer. Citi added.
