Bureau: Since Donald Trump assumed office as President, the international market has witnessed a 2% drop in crude oil prices, bringing the price per barrel down to $79. Experts suggest that this decline in crude oil prices will lead to a reduction in refinery costs. This indicates an increase in the supply of American crude oil. Additionally, the policies of the Gulf countries' oil-producing organizations, OPEC and OPEC Plus, are expected to fail in this context.
There is speculation that all policies of the Gulf countries will pale in comparison to Trump's strategies. Countries that import 80% of their crude oil requirements, such as India, are expected to benefit from this situation.
Currently, OPEC has reduced production to keep crude oil prices high. On the other hand, geopolitical tensions in the Gulf countries have disrupted the supply of crude oil, keeping prices around $80 per barrel. Donald Trump has entered the global economy and politics, with industry officials stating that American crude oil production will increase again. This will boost the international supply of crude oil, leading to a decrease in global oil and gas prices. Indian consumers and other countries dependent on crude oil imports will benefit from this.
According to media reports, Mukesh Surana, CEO of Ratnagiri Refinery and Petrochemicals Limited, stated that if President Trump follows through on his promises, drilling in America will increase. Shale production can be rapidly expanded, and America has many shale sources. This will increase capital expenditure in the upstream sector and boost global supply.
Surana mentioned in media reports that, in the long term, American oil production will reduce the power of OPEC Plus, the organization controlling the global oil market. Increased American exports could lead to an increase in OPEC Plus supply in some markets, reducing prices. Importantly, this could force OPEC Plus and other producers to rethink their strategies. In his inaugural speech, Trump emphasized his energy priorities, stating that they will reduce prices and export American energy worldwide.
In the past two days, oil prices have dropped from around $81 to $79 per barrel. Officials expect that lower crude oil prices will reduce costs for refiners, but petrol and diesel prices may not decrease immediately, and retail prices will only drop if international rates remain low for an extended period. Trump presented himself as a "unifier" in his inaugural speech, leading some industry officials to believe that the Ukraine war could end soon.
An official from a gas marketing company mentioned in a media report that if Russia is allowed to supply gas to Europe before the war ends, LNG prices will drop significantly. Some Indian refining and gas marketing officials hope that crude oil and LNG prices will decrease by 20% after the war ends. Domestic gas consumers will also benefit from lower oil prices, as India's long-term LNG import rates are linked to oil. Trump stated that he would end the "Green New Deal" and withdraw the Biden administration's key policy, the "Electric Vehicle Mandate." An industry executive mentioned that how other countries react to this will be crucial for the growth of the green energy sector.
