Trump is back – what does that mean for oil and gold?

Answering the question of which candidacy would be better for the oil market is not trivial. Trump is seen as better for the oil industry because he wants to dismantle existing environmental regulations, which is expected to lead to more rapid increases in U.S. oil production. Vice President Kamala Harris, who was defeated in the election, would have stuck to the Biden government’s regulations. However, a look at the development of US oil production during the previous four US presidencies does not show a clear picture as to whether there is a difference which party the president belongs to (see chart 1). During Trump’s first presidency between 2017 and 2021, crude oil production increased by 25 percent. However, it should be borne in mind that production collapsed in spring 2020 due to the corona pandemic and only recovered slowly afterwards. By the end of 2019, production had increased by 46 percent within three years. The increase at this point even exceeded that of Barack Obama’s two presidencies. These amounted to 38 percent between 2009 and 2013 and 25 percent between 2013 and 2017. This period saw the beginning of the shale oil revolution and the lifting of the export ban on crude oil, both measures that favored oil production. The decline in production at the end of Barack Obama’s second term was due to the price war for market share triggered by Saudi Arabia, which resulted in US shale oil production falling. Otherwise, the increase in production would probably have been similar to the previous four years. This shows once again how important price and profitability are for production.