Going into the 2024 U.S. election, energy was on the ballot as Vice President Harris favored continuing the Biden administration’s climate change policy favoring alternative and renewable fuels while inhibiting the production and consumption of hydrocarbons. Former President Trump and Republicans favored a “drill-baby-drill” and “frack-baby-frack” policy of encouraging fossil fuel production to achieve energy independence and make the U.S. the world’s supermarket for traditional energy. The former President argued that crude oil was liquid gold and increasing exports would increase income, reduce inflation, and lower the deficit.
On Tuesday, November 5, the U.S. went to the voting booth and elected the 47th President and the energy policy for the coming four years. Donald J. Trump won a landslide victory, capturing 312 electoral college votes and a majority in the popular vote. Moreover, Republicans won a majority in the Senate and a slim majority in the House of Representatives. The mandate creates no roadblocks to the passage of the Trump agenda. In his acceptance speech, he said, “Promises made, promises kept.”
One of the campaign’s central pillars was U.S. energy policy. The bottom line is a complete reversal of the Biden administration’s energy policy, which will substantially impact traditional energy prices.
U.S. crude oil production will rise
- Before the election, the final EIA data from November 1, showed that U.S. crude oil production was 5 million barrels per day.
- “Drill-baby-Drill” and “Frack-baby-Frack” will return under the Trump administration, increasing daily U.S. petroleum production.
- Rolling back environmental regulations will increase U.S. output. On the campaign trail, President-elect Trump called U.S. oil reserves “liquid gold.”
- The incoming administration plans to achieve energy independence and become the world’s leading oil exporter, which will increase revenue, lower inflationary pressures, and reduce the U.S. debt.
Expect the Trump administration to rebuild the U.S. SPR
- As of November 15, the U.S. Strategic Petroleum Reserve stood at 389.2 million barrels, 246 million below the level in January 2021 when the Biden administration took over energy policy.
- Increased U.S. output under the incoming administration will likely replenish the SPR to the previous 600 million barrel level.
- A substantial SPR is a national security matter for the Trump administration.
OPEC+ pricing power will decline
- Under the Biden administration, inhibiting the production and consumption of oil and gas addressed climate change, handed OPEC+ pricing power in the international petroleum market.
- OPEC+ production policy kept oil prices elevated over the past years as the U.S. was a net petroleum importer.
- Ramping up U.S. crude oil output to levels where the U.S. achieves energy independence and becomes a net exporter will diminish OPEC+’s pricing power and influence.
Crude oil prices will likely return to pre-pandemic levels
- From January 2021 through November 2024, under the Biden administration, nearby NYMEX crude oil futures traded in a $47.18 to $130.50 range. Nearby Brent crude oil futures were $50.57 to $127.99 per barrel.
- During the previous Trump administration, from January 2017 through December 2022, nearby NYMEX crude oil futures traded in a range from below zero at the height of the global pandemic to a high of $76.90. Nearby Brent crude oil futures were in a $16.00 to $86.72 per barrel band.
- The Trump administration is more focused on energy policy going into its second term, making prices below $50 and perhaps under $40 per barrel likely.
Traditional energy assets that can appreciate over the coming months and years
- On November 25,2025, nearby January NYMEX WTI crude oil futures were at the $69.50 level, with January Brent futures at $73.50 per barrel
- The Trump administration’s energy policy plans could send prices appreciably lower over the coming months.
- The Bloomberg Ultrashort Crude Oil -2X ETF (SCO) is a short-term trading vehicle that attempts to deliver twice the decline of nearby NYMEX crude oil futures on the downside. SCO requires careful attention to risk-reward dynamics as the leveraged ETF will suffer from time decay if crude oil prices remain stable or move higher.
- The VanEck Oil Services ETF product (OIH) owns shares in U.S. listed companies involved in oil services to the upstream oil second, including oil equipment, oil services, or oil drilling. Ramping up U.S. petroleum output requires increased investment in oil services.
Crude oil prices could be heading for much lower levels as the U.S. pivots energy policy under the incoming Trump administration. Elections have consequences, and the November 5 victory that included majorities in the Senate and the House of Representatives will make the U.S. a worldwide petroleum powerhouse, increasing the odds of lowering prices.
Thanks for reading, and stay tuned for the next edition of the Tradier Rundown!