12 January 2017
As Donald Trump’s inauguration fast approaches, the number one concern among delegates attending an energy conference in Abu Dhabi on Wednesday was what energy policies he will implement when he takes over at the Oval Office.
Delegates at the 2017 Energy Forum at New York University’s campus in Abu Dhabi were asked to vote on what they believed was the biggest geopolitical risk facing the world in 2017.
They were given three choices:
1- Trump’s “America first” philosophy.
2- China overreacts to geopolitical challenges ahead of the 19th Communist Party Congress leadership shuffle.
3- Germany re-elects a weaker Angela Merkel into a fractured growing anti-EU Europe.
Trump was selected by 65 percent of those taking part. Commenting on the result, Neil Atkinson, head of oil industry and markets division at the International Energy Agency (IEA), attempted to calm fears by stating that the real concern for the U.S. oil industry in 2017 is not Trump’s policies but the oil price itself and whether it will remain at the $50 per barrel range.
For more on the oil crisis, click here: Free falling oil prices and the GCC
Trading Middle East: Oil stays below 50 a barrel
“As far as the U.S. oil industry is concerned, the most important question facing them...are oil prices going to be sustained at the $50 a barrel? And if that is the case, is that going to provide sufficient certainty and sufficient platform for there to be a recovery in U.S. shale oil production?" Atkinson said.
"And that really doesn’t have a great deal to do with the election of president-elect trump,” he added.
Throughout his presidential campaign, Trump angered many around the world with his promise to ban Muslims from entering the U.S. and to build a wall along the Mexican border. Read more here.
Gal Luft, co-director at the Institute for the Analysis of Global Security in the U.S. pointed out that the American president does not have direct powers over the oil market.
“The American energy industry is operating as a business. It is not a state-owned enterprise. The role of the government is at best to facilitate the market, to let the market work rather than control it and if the industry thinks it needs to increase production, it will,” he said.
However, Luft said a shift in American foreign policy towards some oil-producing countries, such as Venezuela or Libya, could trigger changes in production levels, which would have a direct impact.
During the campaign, Trump also threatened to restrict imports of crude oil from Saudi Arabia, which many analysts dismissed as “very unlikely”. Read more here.
Luft said Trump has a perfectly good reason to continue buying oil from Saudi Arabia: weapon sales.
“My view is that the only reason that he might want America to buy oil from Saudi Arabia, not that he has control over it I think, but I think he would prefer this relationship because we want Saudi Arabia to buy our weapons,” he said at the forum in response to a question from Zawya on the likelihood of Trump carrying out his threat to stop buying Saudi oil.
Trump has already reduced his own personal business connections to Saudi Arabia, as shortly after his election victory he shut down four companies he had set up in 2015 to facilitate potential deals in the kingdom. Read more here.
© Express 2017