US Elections: Repealing the Inflation Reduction Act Will Cause Sea Change in Energy Markets

With 3 charts

Greetings form Abu Dhabi where I am attending the largest energy show on earth: ADIPEC!  Many energy ministers and CEOs spoke at the conference.  AI dominated the discussions.  The divide between North and South regarding climate change policies was clear.  The presence of Chinese companies, specially manufacturing companies that provide products for various energy industries, was visibly large. That was not the case a few years ago. 

Now back to our main subject:

If the Republicans end up controlling all three houses, the likelihood of repealing the Inflation Reduction Act (IRA), or parts of it, is very high. Repealing even parts of it, would cause a sea change in the energy markets, especially in two areas: electric vehicles and offshore wind. The impact is global and not only limited to the US. The result is higher demand for oil and natural gas than current expectations. There are parts of the IRA that Republicans and the oil industry like, but any way you look at it, it is government giveaway.

While the Trump Administration will emphasize US energy supremacy, it will also focus on lowering energy prices. It remains to be seen how companies and the oil-producing countries will react to lower oil prices.  In our view, Trump cannot have it both ways at once.

Wars and Sanction