US Policy Shifts Lay Ground for New Energy Order

US President Donald Trump has stormed back into office with a head-spinning array of new policies and executive actions that have the potential to disrupt both energy flows and long-standing global alliances. This week saw the well-telegraphed, if messy, rollout of tariffs on Canada, Mexico and China, followed by a partial, temporary rollback. More tariffs are coming in April, and European countries fear they might be next. The accelerating trade war, if sustained, could wreak havoc on the highly integrated North American energy market and create fresh uncertainties about global oil demand growth. In parallel, policies motivated more by geopolitical goals — involving Russia, Iran and Venezuela, in particular — could also have fundamental impacts on trade flows. The tariffs on the US’ neighbors and allies came into effect just days after a high-profile White House meeting with Ukrainian President Volodymyr Zelenskiy highlighted a quickly fraying relationship between Washington and Kyiv. The contentious meeting starkly illustrated Trump’s determination to end the Ukraine conflict, with reports following soon after that his administration is starting to prepare plans to ease sanctions on Russia as part of those negotiations. At the same time, Trump decided to cancel Chevron’s license to export crude from sanctioned Venezuela, forcing the US major to wind down operations there within 30 days. This could hit production in that country by as much as 250,000 barrels per day. Analysts also expect more US pressure on Iran to limit the Islamic republic’s 1.7 million b/d in crude exports, but there has been limited action on this so far. Markets struggled to interpret signals from this barrage of news — potential sanctions relief that could bring more Russian oil and gas to the open market, stronger action on Venezuela that would do the opposite, uncertainty over Iran restrictions and a feared dampening impact of tariffs on global economic growth. Adding to this, Opec-plus decided to release more oil to market from April.