Macro
Trump is likely to implement universal tariffs on imports to encourage domestic production, along with incentives for reshoring key industries back to the US. He will most likely reduce the corporate tax rate to 15%, extend individual tax cuts, and eliminate taxes on Social Security benefits. At the same time, he is almost certain to push for a "big bang" of deregulation, which will decrease the regulatory burden and costs for corporate America. On the balance, while tariffs will ultimately be inflationary, tax cuts and deregulation will be deflationary, and it's hard to predict which factors will prevail in the end. On the geopolitical front, Trump will exert maximum pressure on Iran in order to prevent the country from developing a nuclear bomb. His policy may end up reducing Iran's crude export by up to 1.5 million bpd. Currently, China takes up more than 80% of Iranian crude export, which means that Trump's maximum pressure policy will need China's support to succeed. Trump may use the threat of 60% increase in tariffs on China's import as a negotiation tool to gain China's support.

Gas & LNG
President-elect Trump has long-supported energy independence, and his return to the White House signals a shift toward deregulation, faster permitting and an end to the Biden administration's LNG pause –which has helped tighten global balances in the medium term. Trump has vowed to reverse the pause when he takes office. This would benefit developers with pending projects, but the feasibility of fast-tracking these developments remains uncertain and could worsen the supply glut in the medium term.

Trump's push for growing LNG exports could clash with trade tensions, as the reintroduction of tariffs could lead to reduced demand from China. This would have negative consequences, as US LNG projects rely on securing consistent demand from China.

Despite these risks, the Trump administration could still bring major benefits to the US energy sector. By rolling back regulatory barriers and fast-tracking permits, Trump could help ease infrastructure bottlenecks and support long-term US LNG export growth. Additionally, his policies would likely foster a more favorable environment for operators, improving market sentiment and encouraging further capital inflow into energy projects.

The energy transition
The Inflation Reduction Act (IRA) faces potential challenges under a Republican-controlled Congress, particularly its low-carbon energy provisions. However, immediate repeal of key tax credits such as CCUS (45Q), clean energy manufacturing and decarbonization (45X, 48C), technology-neutral clean electricity (48E, 45Y) and clean hydrogen (45V) is unlikely. These programs enjoy bipartisan support and disproportionately benefit Republican-led states. While speculation about the withdrawal of these credits remains premature, the 30D electric vehicle consumer credit is more vulnerable to repeal.

A Republican-led economy may prioritize supply-demand cost dynamics, favoring lower-cost production pathways and fostering demand growth, which may ultimately support clean technology developments. The narrative around global warming might be sidelined in government communications, as seen during Trump’s administration, shifting the focus to job creation and economic growth as primary drivers of cleantech advancement.

State-level policies are expected to diverge from federal communications, with coastal states maintaining their clean energy agendas. Nationally, the US may adopt a more oppositional stance on climate-focused initiatives.

US onshore
Overall drilling and completion activity is set to decline by roughly 1% in 2025. With no call on US production and a firming of the gas market in 2025, activity growth in gas basins will offset stagnant to moderately declining activity in oil basins. Efficiency gains across drilling and well stimulation operations also contribute to the negative activity revisions from a rig and frac fleet demand perspective. Barring any immediate short-term change to a call on US oil production, it is difficult to formulate a thesis that would reverse the oilfield service trend in 2025 due to the incoming Trump administration. Trade actions and tariffs on products such as Oil Country Tubular Goods (OCTG) and carbon steel plate material, widely used for pressure vessels in oil and gas facilities, could immediately impact operators' costs. Should Trump implement these measures after re-taking the White House, costs to operators would likely increase in these categories, which could impact activity further against a softer oil commodity backdrop. 

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Authors: 

Claudio Galimberti  

Senior Vice President, Oil Markets, Head of Americas Research
claudio.galimberti@rystadenergy.com

Manash Goswami

Vice President, Analytics
manash.goswami@rystadenergy.com

Marina Domingues

Vice President, Head of New Energies Research, North America
marina.domingues@rystadenergy.com

Emily McClain

Vice President, North America Gas Markets Research
emily.mcclain@rystadenergy.com

Mark Quesada

Vice President, Supply Chain Research
mark.quesada@rystadenergy.com

(The data and forecasts contained in this column are Rystad Energy’s and the opinions are of the authors.)