In recent times, Wall Street banks have expressed that if former President Trump were to win in the US elections, it could lead to a drop in oil prices. Goldman Sachs and Citigroup both pointed out in their reports that Trump's trade tariffs could have a bearish impact on oil prices. Goldman Sachs analysts stated that if the tariffs severely impact the global economy, oil prices may fall by 11 to 19 US dollars per barrel next year. Goldman Sachs economists analyzed a situation where Trump imposes a uniform 10% tariff on all imported commodities, while other countries retaliate with equal tariffs. Citigroup analysts pointed out that the Trump administration will continue to bring bearish risks, mainly involving trade policies, oil and gas policies, and his impact on the OPEC+ oil-producing countries alliance. Both reports mentioned that if Trump restores his previous policy of cracking down on exports to Iran during his tenure, it may also push up oil prices. Goldman Sachs predicts that Iran's production may drop by about 1 million barrels/day, accounting for about one-third of its total output, during Trump's second term. However, other OPEC+ exporting countries may attempt to fill this gap, limiting the upward momentum of oil prices to about 9 US dollars per barrel. In addition, although Trump pledged to increase US oil production, analysts predict that it will not have a substantial impact on output, as US oil production is already at record levels. Citigroup believes that the most likely measures that might be taken include increasing leasing and land auctions, and lifting the leasing ban on Alaska's National Petroleum Reserve.

Goldman Sachs and Citigroup both pointed out in their reports that Trump's trade tariffs could have a bearish impact on oil prices.

Goldman Sachs analyst stated:

If the tariffs severely impact the global economy, oil prices may fall by 11 to 19 US dollars/ barrel next year.

Goldman Sachs economists analyzed a situation where Trump imposes a uniform 10% tariff on all imported commodities, while other countries retaliate with equal tariffs.

Citigroup analysts pointed out:

The Trump administration will continue to bring bearish risks, mainly involving trade policies, oil and gas policies, and his impact on the OPEC+ oil-producing countries alliance.

Both reports mentioned that if Trump restores his previous policy of cracking down on exports to Iran during his tenure, it may also push up oil prices. Goldman Sachs predicts that Iran's production may drop by about 1 million barrels/day, accounting for about one-third of its total output, during Trump's second term. However, other OPEC+ exporting countries may attempt to fill this gap, limiting the upward momentum of oil prices to about 9 US dollars per barrel.

In addition, although Trump pledged to increase US oil production, analysts predict that it will not have a substantial impact on output, as US oil production is already at record levels. Citigroup believes that the most likely measures that might be taken include increasing leasing and land auctions, and lifting the leasing ban on Alaska's National Petroleum Reserve.

Citigroup stated:

Even though Trump seems to be more inclined towards supporting the oil and gas industry than the Democratic candidates, his direct impact on the actual oil market may be limited.

Earlier this year, Citigroup predicted that if Trump were to win, it would enhance the bank's expectation that oil prices will fall to 60 US dollars per barrel by 2025.

Editor/ping