Crude benefits, climate woes may be in store as Trump takes hot seat

COP29 may be impacted, where it is feared there will be no representation from leading nations

In his victory speech on Wednesday, Donald Trump, the United States (US) President-elect, said the country had “more liquid gold than any country in the world”.

 

While his comments on raising crude oil production are meant to keep fuel prices in check for Americans, Trump said the country’s oil reserves would be used to pay back national debt. “We’re going to be paying down debt. We’re going to be reducing taxes. We can do things that nobody else can do. China doesn’t have what we have,” he said. 

This statement could be a signal for the shift in the energy transition policies of the US, which took a green turn under Joe Biden as President.

  Trump, famously frank about his anti-climate action stance, had once called climate change a hoax.

  The Republican Party under him has maintained a soft stand on fossil fuel. In his election campaign he even promised to bring back jobs of coal miners.

  Climate commitments of the US, including financing to poorer nations, might become doubtful and this would set a similar trend among other developed nations, experts said. 

  “Trump’s victory is a profound blow to global climate justice and an alarming escalation of climate risks for the worldʼs most vulnerable communities. His push to ramp up fossil-fuel production, disregard for international agreements, and refusal to provide climate finance will deepen the crisis, endangering lives and livelihoods, especially in regions least responsible for, yet most impacted by, climate change,” said Harjeet Singh, global engagement director, Fossil Fuel Non-Proliferation Treaty Initiative.

 

  The immediate impact will be on the upcoming COP29 (Conference of Parties29) in Baku, where, it is feared, there will be no representation from leading nations, according to reports.

  Along with it, expectations of increasing the basket of climate funding from developed nations could dampen.

  “With COP29 talks starting in Baku next week and aiming to secure an ambitious new climate finance goal, this news makes the already challenging path to a consensus even steeper and more uncertain. The world cannot afford to have its largest historical carbon emitter and top fossil fuel producer shirking its responsibility,” Singh said.

  Experts fear the new regime may renege on commitments in the Inflation Reduction Act of the Biden administration, which increased investment in green sectors, stepping back from the US’s commitment of $3 billion to the Green Climate Fund and overall reduction in financial support to the developing world for meeting their climate targets.

  However, Trump’s win is being seen as a net positive for India’s energy security and crude oil import. A long-time supporter of fracking and higher crude oil production, Trump has indicated he wants to raise US oil exports.

  The US was the fifth-largest source of crude oil for India in the first five months of 2024-25. This position it has retained since the pandemic despite the major discounts on Russian oil in the past two years. 

  “Despite the shifting nature of crude oil flows at a time when geopolitical pressures have been huge, import from the US has remained steady,” an official said.

  Exports of US crude grades averaged 3.85 million barrels per day (bpd) over January-October, largely unchanged from the previous year, S&P Global Commodity Insights pointed out in a research note released on Wednesday. However, exports to Asia during the period fell about 88,000 bpd or 5.7 per cent year-on-year as China’s imports of US crude oil plummeted to 155,000 bpd, down from 305,000 bpd in 2023. In the next 12 months, this should further help India and other buyers in hammering out more favourable prices.

  US exports to India averaged 161,000 b/d in the first 10 months of the year, an increase of 22,000 b/d year on year, S&P said.

 

Asian countries will have more opportunities to import attractively priced oil from the US due to another reason as well, analysts say. America’s domestic production has continued to grow rapidly while competition with the Organisation of Petroleum Exporting Countries (Opec) has intensified.

 

“With growth in US oil production and export, the country will continue to compete with Opec in exporting to Asia, while targeting European refiners and developing new markets in Africa and Latin America,” said Benjamin Tang, head of liquid bulk at S&P Global Commodities at Sea.