In April 2018, with oil prices close to a three-year high of $ 75 a barrel, OPEC ministers meeting in Jeddah were excited. Then, President of the United States, Donald Trump, tweeted: “It looks like OPEC is back. With record amounts of oil everywhere, including ships fully loaded at sea, oil prices are artificially very high! It is not good and will not be accepted! “
This marked the beginning of an era of unprecedented presidential intervention in the oil markets. But things are about to change, with timid incoming social media president Joe Biden unlikely to lead petrodiplomacy by tweet, and more focused on the transition to cleaner fuels.
Trump’s approach was often contradictory and defied convention. But it hit its mark more often than not, say industry experts.
“The president adopted Twitter instead of sending the secretary of state to the Middle East or the United States ambassador to Saudi Arabia,” said Amy Myers Jaffe, a professor at Tufts University outside Boston, Massachusetts. “And the fact is, it was effective.”
What started with Trump proclaiming “American energy dominance” and rebuking OPEC for not producing enough oil, culminated this year when he urged the producers’ cartel to raise prices to save the U.S. shale area from disaster.
Although Trump’s Twitter feed speaks of oil or OPEC dozens of times since he took office – usually at prices close to $ 70 a barrel – Biden can take a leaf from the Obama administration’s book. In eight years, the previous president’s White House mentioned the cartel on social media only twice. For the most part, international oil has also sailed under the radar in politics.
With urgent tasks on Biden’s plate – from the coronavirus pandemic and vaccine distribution to stimulating a shaky economy – petro-diplomacy will not be an immediate priority, analysts say.
The influence of Harold Hamm is gone, the billionaire chief of shale producer Continental Resources and a confidant of Trump who spoke frequently to the president as oil prices plummeted this year, according to a recent note from consultancy Rapidan Energy. There will be experts with a focus on the environment, like Gina McCarthy, a former environmental regulator who will now coordinate politics as a domestic “climate czar”.
Some U.S. oil producers fear that the shift in focus – and Biden’s plans for stricter pollution rules and drilling limits – will affect the country’s oil production.
Scott Sheffield, head of shale producer Pioneer Natural Resources, told the Financial Times recently that US production – down 15% since reaching its historic peak this year – could fall by as much as 3% in the next decade because of Biden.
But despite Trump’s support, the experience of the oil industry and especially its investors during the Trump years was distinctly mixed.
Even before the pandemic, the shale industry was malfunctioning, hit by a business model that achieved rapid growth in supply, but destroyed billions of dollars of capital.
Wil VanLoh, head of the private equity group Quantum Energy Partners, told FT that the impetuous search for production growth had “pierced the heart of the watermelon”, triggering a war of words in shale fragments.
The increasing number of bankruptcies and the dismissal of tens of thousands of workers has revealed a sector in deep crisis. The company with the highest profile to hit the wall was Chesapeake Energy, a pioneer in the shale revolution. But the pain has also reached the top of the United States’ oil industry. ExxonMobil, once the largest company in the world in terms of market valuation, suffered three consecutive quarterly losses and spent 2020 reducing capital expenditures and jobs. Rival Chevron was also forced to cut back sharply.
The S&P 500 energy stock price index, comprising mainly oil and gas companies, fell more than a third between Trump’s tenure in January 2017 and the start of the crisis in March this year, and has lost another 11 percent since So. Under Obama, the index has risen more than half.
A recovery from these actions now appears to be underway, despite the electoral victory of a presidential candidate who said during the campaign that he wanted to “transition the oil industry”.
Although the new president is under pressure from his own base to proceed with his proposal for a clean energy revolution, some members of the oil industry remain optimistic.
“I am confident that Joe Biden, who spent years and years on the Senate Foreign Affairs Committee, understands the difference between an era when the United States depended on foreign energy and the years we live in now, which is an era of abundance ”Said Mike Sommers, president of the American Petroleum Institute.
Newsletter twice a week

Energy is the indispensable business in the world and Fonte de Energia is your newsletter. Every Tuesday and Thursday, right in your inbox, Energy Source brings essential news, forward-looking analysis and privileged information. Sign here.
Others agree that Biden will have little choice, once in office, except to engage in international oil policy. Trump was not the first president to ask OPEC to lower oil prices – nor to ask the cartel otherwise. George HW Bush also called on Saudi Arabia to cut production and raise prices to save American oil producers.
International economic stability still depends on keeping oil prices cheap enough, said Jaffe, while many American jobs are increasingly dependent on keeping them high enough.
The crisis that swept the oil market this year would have bothered Biden too, said Sarah Ladislaw, head of the energy security and climate change program at the Center for Strategic and International Studies in Washington. “I just don’t think you would have read about it publicly.”
But while the new leader is likely to be less vocal than Trump about oil and less inclined to scold OPEC on Twitter, Jaffe suggested that no U.S. president, even one who advocates a clean energy platform, could ignore the oil market. .
“Global economic leadership means that the United States has to worry about oil prices being too high or too low,” she added. “We are still the leaders of Cachinhos Dourados when it comes to oil.”
Climate Capital

Where climate change meets business, markets and politics. Explore FT coverage here