Difference between Trump and Clinton as president: One million barrels of oil a Day
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If Trump becomes next U.S. president, it could mean a boost to U.S. oil production
“This election is going to have a major impact on the direction of U.S. and, possibly, global oil supply. Maybe the most significant impact of any election in U.S. history,” said Brian Scheid, senior oil editor at Platts, at the Platts Crude Oil Summit in London on Tuesday.
Looking at a worst case/best case scenario worked out between several analysts in Washington, he estimated that with a Republican win, U.S. oil production could jump by as much as 500,000 barrels a day. If the Democrats win, there could be a decline of 500,000 barrels a day, Scheid said.
Scheid cautioned, however, that it’s extremely difficult to quantify the impact on the oil market and that it’s a best estimate with some informed speculation. Other major events such a coordinated OPEC output cut, Libya starting to export large amounts of crude again or a collapse of Venezuela’s economy are other variables that could easily have a bigger effect on the market, he noted.
But looking separately at U.S. oil production, it seems inevitable that the election outcome will change the dynamics.
Hillary Clinton — pushed left by the movement behind her Democratic rival Bernie Sanders — has vowed to reduce American oil consumption by a third and is seen as possibly banning fracking on public land. She may also further push for efforts to combat climate change, Scheid said.
“Overall, the biggest concern for the U.S. oil industry is how Clinton will deal with fracking,” he said.
And then there’s Trump. The Republican front-runner hasn’t laid out many details on his energy policy, but has boasted that he could have negotiated a much better nuclear agreement with Iran. In a recent interview with the New York Times, he also said he’s considering a ban on oil imports from Saudi Arabia and other Arab allies.
“Who wins in November may dictate if the U.S. shale renaissance peaked last year or if this year has been a dip ahead of a new high,” he said.
U.S. oil production peaked in April last year at 9.6 million barrels a day, but has since declined in response to lower oil prices and cuts in capital expenditures. The U.S. Energy Information Agency estimates that domestic production will fall to around 8 million barrels a day by the third quarter of next year.