Last June, the United States overtook Russia and became the world's largest oil and natural-gas producing country.
However, Russia recently gained back its #1 spot and is now followed by Saudi Arabia with the United States ranked third.
With the 2016 election behind us, it has many wondering: will Donald Trump's presidency influence this at all?
The short answer: —it can.
Trump has made it clear that he wants the U.S. to be energy independent and that he will lift restrictions on U.S. oil drilling. This could lead to an increase in the U.S. market share in oil.
—A Trump presidency that is pro-business will encourage oil development, permit pipelines, reduce corporate profit taxes and generally make U.S. oil more competitive. " — Esai Energy LLC
It is predicted that U.S. companies are going to be able to produce oil at a lower cost with less regulations, leading to more profits for U.S. oil producing companies.
What does this mean for OPEC?
OPEC headquarters, located in Vienna, Austria.[/caption]
The Organization of the Petroleum Exporting Countries (OPEC) is an organization consisting of select petroleum producing countries. They are united with a goal to —co-ordinate and unify petroleum policies among Member Countries in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry, " per their website. You can learn more about the history of OPEC here.
Now, how will Trump's presidency affect them?
Well, the U.S. is not a part of OPEC, and Trump's lift on U.S. oil producing regulations can lead to a more self-sufficient country, as far as energy consumption is concerned.
—The greater uncertainty for the oil market with a Trump win could further make crude prices more volatile and urge OPEC to pull off a deal on a production curb/freeze at the end of November in its bid to not only stabilize but also lift prices. " — Tsvetana Paraskova for Oilprice.com
This means that U.S. oil will become more competitive, meaning a potential OPEC production deal may not be able to be met, as they might not be able to meet potential U.S. low costs. But it's all up in the air right now, so we'll just have to wait and see what happens.
What about fears of a trade recession?
There has been some talk about a Trump recession, should he reduce trade. While Trump's victory initially shook the financial market, it has recovered as of November 9th.
But the stock market doesn't reflect the economy, really. It doesn't represent the average American, who probably doesn't have a lot of money invested in stocks.
Still, if a recession happens, it won't necessarily be Trump's fault. Before his election into office, economists said they were predicting a recession sometime in the next four years. It's a result of factors such as minimal growth in the working age population and minimal productivity growth.
Yet Trump has vowed to deport millions of immigrants and enforce trade barriers, which can have a negative effect on the economy. While economists are skeptical of Trump's promise to bring America's economy a 4% growth —and an increase in jobs, no major recession is predicted in America's immediate future:
"It will be milder. It won't be the cataclysmic, near-death experience." — Mark Zandi, chief economist of Moody's Analytics
And, if Trump avoids a recession, it will mark the longest period of growth in America in U.S. history.
What do you think? Will there be a recession in our future? Sound off in the comments!
https://en.wikipedia.org/wiki/List_of_countries_by_oil_production http://www.marketwatch.com/story/how-trumps-victory-complicates-opecs-oil-output-plans-2016-11-09 http://www.hellenicshippingnews.com/trumps-election-handicaps-opec-deal/ http://money.cnn.com/2016/11/09/news/economy/president-elect-donald-trump-recession/