Trump to exit Paris Climate Deal Again?

The US President-elect Donald Trump has indicated that he plans to support traditional fossil fuels and may even withdraw from the Paris Climate Agreement, in contrast to the "green" Biden administration. What impact will Trump's policies have on oil prices and US LNG exports?Plus Will he lift sanctions against Russian fossil fuels?
Donald Trump has pledged to bolster U.S. fossil fuel production by streamlining the permitting process for drilling on federal lands and promoting the construction of new natural gas pipelines. He has indicated his intention to reauthorise oil drilling in Alaska's Arctic National Wildlife Park. In his inaugural executive ordersas President. Joe Biden prohibited all of the aforementioned activities.

Additionally, Trump has pledged to withdraw the United States from the Paris climate agreement, which aims to reduce global greenhouse gas emissions. The United States has rejoined the agreement under the Biden administration, which has championed a green agenda.

Mr. Trump has also indicated his willingness to support an increase in nuclear energy production.
Furthermore, he has said he intends to reverse Biden's mandate for electric vehicle production and other measures aimed at reducing vehicle emissions.

Trump stated that the United States must increase energy production to remain competitive in the development of energy-intensive artificial intelligence systems.
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Although It would be inaccurate to assume that the US president has a significant impact on the volume of production in the country. Mr. Trump is perceived as a supporter of traditional energy sources, and this is accurate. However, the primary driver of oil and gas production in the US remains economic: if it is profitable, the US will drill. This is according to Igor Yushkov, an expert at the Russian National Energy Security Fund
"In fact, when oil production increased in the US, it was exclusively under the Democrats, despite their opposition to traditional energy resources.
For instance, despite Barack Obama being dubbed the "greenest" president, there was a substantial surge in oil and gas production. This was not a result of his influence, but rather due to the advent of the shale revolution coinciding with his tenure. Following the recovery in demand after the coronavirus pandemic, production volumes also increased significantly under the Biden administration. The US reached a new historical record in production volumes of approximately 13.5 million barrels per day, according to the FNEB expert. Therefore, he does not anticipate a significant increase in oil production under Trump.

"It is unlikely that there will be any significant shifts in oil policy, given that oil production in the US is currently at a high level. "First and foremost, the Trump administration will prioritize reducing the budget deficit, which currently stands at approximately 7%," states Pavel Sevostyanov, Professor of Political Analysis at the Russian University of Economics.
The record oil production volumes in the US have already had a negative impact on oil prices. Furthermore, OPEC+ has so far decided not to increase its own production until the end of 2024. It is possible that Trump will exert pressure on OPEC+ during the new presidential term. It is therefore possible that the price of Brent oil may fall to $60 per barrel or below during the second half of next year. "A further reduction in oil production by OPEC+ and an increase in demand for oil in China and India may prevent a drop in prices," states Natalia Milchakova, leading analyst at Freedom Finance Global.Although its worth bearing in mind that US oil companies need $70 oil to break even where as Russia can still do well at $60 oil . But not the others of OPEC PLus

With regard to the export of American LNG, there is a general consensus between the Biden and Trump administrations. It would be unrealistic to anticipate that Trump will begin issuing licenses for the construction of new LNG plants. Even if he initially reverses the previous decision to ban, he will subsequently implement a similar restriction. The uncontrolled issuance of an endless number of permits for the construction of new LNG plants will ultimately result in the price of gas in the United States being determined by the export netback formula. This is when companies have the freedom to choose where to sell their gas, either in the domestic market or in foreign markets.

The current situation with gas in the US domestic market is characterised by intense competition and low prices. The current market price of gas in the United States is approximately $100 per thousand cubic metres Bear in mind that is 4 times less than the Europeans pay for US LNG
This is why the American economy is highly competitiveit is thanks to the low cost of gas, which in turn allows for low-cost energy and fertilisers. This is why the US is attracting companies from Asia and, in recent years, from Europe. "The return of production to the US aligns with Trump's policy of making America great again," states Igor Yushkov.
The issue pertains to the prohibition on the construction of new LNG plants with scheduled delivery dates after 2030. The current projects are in progress, and new volumes of LNG from the US are scheduled for delivery in 2027-2028.

What implications does this have for Russia?

Experts do not anticipate any significant shifts in the current situation for Russia. It is unlikely that the United States will lift sanctions under the Biden administration. This would necessitate significant political changes. Trump will continue to represent the United States' interests. It seems likely that he will continue to clear the market for LNG from the United States, ensuring that American plants are fully utilised.

Biden has imposed sanctions on new Russian LNG plants, and it is not guaranteed that Trump will not impose new sanctions on already operating LNG plants. It is also possible that Yamal LNG and the Sakhalin plant may be subject to sanctions. "It would be unwise to assume that the situation will improve," says Igor Yushkov.

Nevertheless, it seems likely that Trump will seek to find arguments to slow down the sanctions against Russia. For instance, should Trump cease providing financial and military aid to Ukraine, the conflict may conclude, which could provide a foundation for both Europeans and Americans to suspend a number of sanctions, according to the FNEB expert.