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Former President Donald Trump accused the Organization of the Petroleum Exporting Countries (OPEC) of deliberately driving down oil prices to benefit Vice President Kamala Harris, warning that her potential presidency could be a “disaster” for the U.S.
What Happened: Trump took to his social media platform, Truth Social, to voice his concerns about OPEC’s actions. He wrote, “OPEC nations are going all out to drive down oil prices in the hope that crazy Kamala Harris will win. Then they will really reap the rewards! She will be a disaster for the USA!”
Trump’s comments come in the wake of a recent decline in oil stocks, which occurred amid speculation that Harris might adopt a more stringent stance on the oil and gas industry if she were to become the Democratic presidential nominee and win the White House race.
At the time of publication, oil stocks remain in the red after President Joe Biden opted out of the 2024 election race against Trump and endorsed Harris on Jul. 21 as a top presidential nominee.
WTI Crude has dropped from $78.64 to $75.43 following Harris’s nomination for the presidential run, according to Benzinga Pro data.
Chevron Corp (NYSE:CVX), Marathon Oil (NYSE:MRO), Exxon Mobil (NYSE:XOM), ConocoPhillips (NYSE:COP), and EOG Resources (NYSE:EOG) are all experiencing declines.
ETFs tied to the oil sector have also mirrored this downward trend, with United States Oil Fund (NYSE:USO), SPDR Select Sector Fund – Energy Select Sector (NYSE:XLE), Vanguard Energy ETF (NYSE:VDE), and iShares U.S. Energy ETF (NYSE:IYE) all under pressure.
If Harris wins, her administration might focus on climate policies, including reducing carbon emissions and increasing funding for renewable energy projects. This shift could result in higher compliance costs and stricter regulatory requirements for the oil industry, potentially affecting profitability.
Why It Matters: A report from Citi on Monday suggested that a Trump presidency could be “net bearish” for oil prices. This is due to his oil-friendly policies and potential tariffs, which could increase oil supply and lower prices.
However, according to the same report, the main threat to oil markets under a Trump presidency would be pressure on Iran. If Trump were to adopt his previous maximum-pressure campaign on Iran once again, Iranian oil exports could be reduced by 500 to 900 thousand barrels per day, impacting global markets.
Furthermore, Goldman Sachs warned last week that the next U.S. administration would have limited options to significantly boost domestic oil supply due to low strategic petroleum reserves and potential regulatory easing.
In a broader context, the U.S. has been producing record amounts of oil, averaging 12.9 million barrels per day in 2023. This surge in production has led to concerns of a potential glut, reminiscent of the 2020 COVID lockdown period.
Moreover, Trump’s rift with OPEC is not new. In April 2018, the former president tweeted that OPEC had driven oil prices "artificially very high," a move that "will not be accepted."
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
