Global Market Shifts Driven by Trump’s Energy Policies

During Donald Trump’s inaugural address earlier this week, he boldly claimed that the U.S has “… the largest amount of oil and gas of any country on Earth” signalling a return to aggressive domestic energy production. While factually incorrect, his bold rhetoric aligns with his energy agenda, raising questions about its broader implications for the global energy market.

To back his ambitious claims, Trump quickly signed an Executive Order titled “Unleashing American Energy,” designed to expedite permits for energy projects and remove restrictions on drilling, particularly in areas like Alaska’s Arctic National Wildlife Refuge.

Barely catching a breath between executive orders, he signed another declaring a national energy emergency. This has been labelled by some critics as a policy-driven initiative rather than a data-driven emergency response, aimed at facilitating the expansion of oil and gas production.

These actions may significantly influence global energy markets, including U.S. production levels, oil price trends, and competition among major energy-producing nations, presenting both opportunities and challenges for stakeholders navigating an uncertain landscape.

While some may see these moves as a short-term boon for traditional energy industries, others may worry about their impact on climate commitments and market stability (World Economic Forum). Just within the last 24 hours, at the World Economic Forum in Davos, Trump doubled down on his ‘America First’ rhetoric (BBC). In response, European Union Leader Ursula von der Leyen stated that, “The European Union will continue to lead the fight against climate change, regardless of the policies of others” (European Commission). In a short period, Trump’s policies have had a significant influence on the global oil market, driving several trends. It’s worth noting that China’s oil consumption has shown signs of decline which has been attributed to factors such as slowing economic growth and increased adoption of electric vehicles (Reuters).

Increased U.S. Oil Production

Trump’s “drill, baby, drill” agenda aims to boost domestic oil production by reducing regulations and promoting fossil fuel development. However, the U.S. oil industry faces challenges in further increasing production due to current price constraints and market dynamics (source: Reuters – https://www.reuters.com/business/energy/oil-industry-unlikely-rush-alaska-despite-trumps-call-drill-2025-01-23).

U.S. Oil Production Trends

A historical chart of U.S. oil production trends, highlighting fluctuations over decades.

(Source:U.S. Energy Information Administration (EIA) – “U.S. Field Production of Crude Oil”)

Market Volatility: Impact of Trade Policies on Global Oil Prices

The administration’s tariff implementations have introduced uncertainty in global markets, affecting oil prices. Proposed tariffs have led to declines in oil prices amid concerns over global economic growth and energy demand (source: Reuters).

Shift in Global Energy Dynamics

While the U.S. focuses on increasing fossil fuel output, major importers like China are reducing oil demand by transitioning to green energy and electric vehicles. This divergence may impact global oil demand and trade patterns (source: Financial Times).

Potential Oversupply Concerns

Efforts to boost U.S. oil production could lead to oversupply in the global market, potentially causing price drops. This scenario underscores the need for careful evaluation of production increases to balance market stability (source: Yahoo Finance).

Impact on Renewable Energy Investments

The administration’s emphasis on fossil fuels has led to a slowdown in clean energy funding, with significant reductions in federal support for green projects. This shift may influence the pace of the global transition to renewable energy sources (source: Financial Times).

(Source: International Energy Agency (IEA) – “World Energy Investment 2023”)

Trump’s executive orders aimed at increasing domestic energy production have shifted U.S. energy policy, particularly supporting fossil fuel development. However, the global shift towards renewable energy continues, with the International Renewable Energy Agency (IRENA) reporting a 10% increase in renewable capacity in 2020, alongside $303 billion invested in renewable power (IRENA, Renewable Capacity Statistics 2020).

While Trump’s policies may provide short-term support for fossil fuels, the broader decarbonisation trend remains strong, with global renewable energy investments projected to reach $2.6 trillion by 2050 (BloombergNEF, New Energy Outlook 2020).

For ESG-focused investors, this ongoing transition provides opportunities to align portfolios with long-term market trends. While Trump’s January 2025 executive order to withdraw from the Paris Agreement (source: AP News, 2025, Trump signs executive order directing US withdrawal from the Paris climate agreement) marks a shift in federal policy, many states and businesses continue to drive renewable energy growth. We will explore this topic in more detail in an upcoming article.

As the cost of renewable energy technologies continues to fall, the renewable sector is becoming increasingly competitive. This growing market share is positioning clean energy as an essential component of sustainable investment strategies moving forward.

Trump’s energy policies are reshaping the global market, creating both opportunities and uncertainties. Investors should closely monitor oil prices, OPEC policy shifts, and U.S. production levels over the coming months, as these will influence market trends.

Balancing investments between traditional energy markets and renewable technologies could help manage risk in this evolving landscape. Staying informed and flexible will be key to navigating these changes and seizing opportunities in the year ahead. Alternatively, you can use Jaaims, the AI investing app, to handle this complexity for you, providing data-driven insights and automated investment solutions.

Disclaimer: The information provided is factual and sourced from reputable organisations. It is for informational purposes only and does not constitute financial advice. © 2025 JHC Operating Co Pty Ltd (formerly Neural One Australia Pty Ltd) is an authorised representative of Jaaims Technologies Pty Ltd (Australian Financial Services Licence 519985).