The oil market is one of the most volatile sectors in the global economy. So many factors can affect it, such as production decisions, geopolitical events, market demand, changes in government decisions,s etc. But ever since Donald Trump was re-elected as the Present of the USA in 2024, the graph of oil price changes has been quite significant. Trump’s pro-energy stance is what is behind this. The re-election of Trump favors energy independence and deregulation, which is impacting oil prices, the oil market, and other related stocks.
Oil Market: Trump’s Pro-Oil Agenda
Donald Trump introduced several policies benefitting the oil and gas industry during his previous presidency from 2017 to 2021. He also instructed his administration to approve various major pipeline projects, roll back several environmental regulations, and pull the USA out of the Paris Climate Agreement. All these factors played a crucial role in surging the oil price, benefitting oil companies and related stocks. This trend is also likely to go in 2025 as Trump is on the helm once again.
Achieving American energy dominance in the oil market is the goal of Donald Trump. Under his rule, the USA became the leading oil and natural gas producer in the world. He has always wanted to lessen the reliance on foreign oil while accelerating domestic oil and natural gas production. This is why Trump’s victory will play a crucial role in driving the oil price in 2025. The price in the market could stabilize in the short term. But the long-term oil price movements in the oil market would be decided by several macro factors, such as, OPEC decisions, global demand, and other geopolitical events.
Who Would Benefit from the Oil Market?
Trump’s pro-oil approach is likely to drive the oil price high in the market, which-in turn might impact several stocks. A few oil stocks that could be impacted by this are described below.
ExxonMobil (XOM) – Oil Market
This is one of the biggest players in the American oil market. ExxonMobil’s focus on upstream oil production and extensive global operations make it perfectly positioned to benefit from the increased domestic oil production. As Trump has won, there would be fewer regulatory burdens to boost the stock price of ExxonMobil.
Chevron (CVX) – Oil Market
This is another big player in the American oil market and gas sector. Chevron has a strong presence in shale production coinciding with Trump’s objective of increasing domestic production. This is why the oil stock of Chevron might go up in 2025 for all the right reasons.
Pioneer Natural Resources (PXD) – Oil Market
This is another company that specializes in producing shale oil, specifically in the Permian Basin. As Trump has given green signals for increased shale development and hydraulic fracturing, the stock of this company is highly likely to see positive growth in 2025. The Trump-led administration is there to ensure all the constraints and burdens are removed.
Occidental Petroleum (OXY) – Oil Market
This American company puts a strong focus and emphasis on the Permian Basin. Their investment in carbon capture technology is to effectively navigate all the regulatory issues. As a result, the stock of this company is to benefit from enhanced oil and gas production in the USA.
Halliburton (HAL) – Oil Market
Hal is considered as of the major oilfield services companies out there. They offer important technologies and tools to extract and drill oil. Trump administration’s increased effort in ensuring domestic oil and gas production would directly benefit them in 2025. This oil stock is highly likely to gain from the increased production and positive gain in the oil market.
Potential Risks and Challenges
Despite the high potential for price rises in the oil market, there are several risks and challenges that oil companies are supposed to be wary of. The global push towards renewable energy would be one of the major challenges to overcome for the Trump administration as well as the oil companies. As the Biden administration lobbied for clean and green energy, it could pose some challenges for the Trump administration.
On the other hand, renewable energy technologies and the rise of EVs (Electric Vehicles) would also affect the overall global oil demand, hampering its growth to some extent. This is why oil companies are required to do the needful to stay relevant in the oil market. Diversification could be one such avenue in this regard, which could help them navigate this problem in the long run.
Global Implications – Oil Market
Trump’s win in 2024 is likely to have long-term global implications in 2025, which in turn could impact US oil production. It might leave an impact on different oil-producing nations and OPEC. On the other hand, the market’s balance of power might put America in a strong position as a market leader in 2025.
What if there are some sanctions initiated by Trump on geopolitical aspects? Well, then, it could definitely disrupt the supply chain in the global oil market. For instance, if Trump issues some sanctions on Venezuela or Iran, then it would tighten the global oil supply, which will drive the oil price, impacting the associated oil stocks.
Investment Opportunities – Oil Market
It would be a great chance for investors to invest in different oil stocks to capitalize on future gains. There are various strategies to go for:
Opt for American Shale Producers
It would be wise for the investors to invest their hard-earned money in different US Shale stocks, such as the Permian Basin.
Diversify the Investment
Another good approach would be to diversify the investment of oi ndifferent oil and gas stocks. This is how the investors would be able to hedge against the long-term risks.
Oilfield Services
Companies like Schlumberger and Halliburton would see their stock price go up due to their increased oil exploration and drilling activities. As a result, it would be beneficial for investors to invest in such oilfield services to ensure growth in 2025.
Midstream Operators
On the other hand, there are various pipeline companies that transport oil and gas that might see their stocks up. You, as an investor, would benefit from investing in such stocks. In this regard, choose to invest in stocks like Enbridge (ENB) and Kinder Morgan (KMI).
What Would Be the Long-Term Outlook for the Global Oil Market?
Nothing can be said about the long-term growth and prospect of the global oil market. There are various factors in play that could impact the long-term outlook for the oil market, such as ongoing energy transition, technological advancements, and economic conditions. Trump’s presidency could definitely drive the oil price in the international oil market in 2025, but not the long-term oil price.
Oil price movement in the international oil market is a volatile aspect that is always affected by an effective combination of supply and demand dynamics, environmental policies, and geopolitical events. You, as an investor, should be careful with each of your investment decisions in the oil market. Measure your risk-reward ratio before investing. Check out the broader market trends in the long term for long-term gain in the market.
Conclusion
Trump’s win in 2024 will definitely impact the oil prices in the global oil market in 2025. But when it comes to long-term price projections in the oil market, there are various factors associated with demand-supply dynamics, geopolitical events, and several other aspects. It is important for long-term investors to consider all the factors before investing their hard-earned money.
Investors should always be aware and alert about the oil price movements in the oil market in 2025. Despite being an opportunity, it could also post some serious risks in the oil market despite Trump’s pro-oil agenda. This is why it would be quite a complex and compelling topic to shed light on. Only time will tell when it goes from here.
FAQs
What Factors Impact Oil Prices in the Global Oil Market?
Ans: There are various factors that impact oil prices, such as global demand and supply dynamics, geopolitical events, international affairs, and other aspects.
How Trump Victory Would Play in Deciding the Oil Stocks?
Ans: Trump’s win in 2024 would definitely impact the oil price in the global oil market, which in turn might positively drive oil stock prices up. It would be beneficial for investors to invest in the best oil stocks.
How to Choose the Best Oil Stock?
Ans: You are required to do detailed research to find the best oil stock in the United States. Doing proper fundamental and technical analysis on different oil companies or oil stocks would be beneficial for you as an investor.
Are There Good Oil Stocks to Buy?
Ans: Yes, there are plenty of good oil company stocks available that you can buy to get good gains in the future. Just do your prior research to find high-growth oil and gas stocks.
Would Oil Stock Prices Be Volatile in 2025?
Ans: According to financial experts and analysts, the oil prices in the global oil market would stabilize due to Trump’s win. But there could be different factors that might make the oil prices volatile if something big happens in the world.
