AMERICAS OIL: Investors Await Impact of Trump’s 2nd Term on Oil: Commerzbank
Investors Await Impact of Trump’s 2nd Term on Oil Market: Commerzbank
• A note from Commerzbank stated commodity markets are nervously awaiting the inauguration of Donald Trump, with some of his initial measures likely to have already been priced in.
• The measures, including the likely lifting of the moratorium on US LNG export licenses and the general ban on drilling on federal lands, are not expected to have a short-term impact on oil and gas production.
• Of greater interest is how Trump will position himself on sanctions against Russia and Iran. The latest Russian sanctions have caused the price of Brent to rise significantly in the last few days and has prompted major buyers China and India to look for alternative suppliers.
• Sanctions against the Iranian shadow fleet in mid-December 2024 by the Biden administration jeopardizes exports of around 500kbpd per the IEA. Markets are waiting to see whether Trump tightens the Iranian sanctions further. If so, oil prices could surge more.
• However, the bank assumes that Trump would like to avoid that surge and initially use sanctions as a bargaining chip in potential negotiations with Russia.